Plans to float Bermuda-based Alea Group on the London Stock Exchange before the end of the year were given a thumbs up on Friday by rating agency AM Best Co.

The leading rating agency said Alea's financial strength rating of A- (Excellent), which applies to the insurance and reinsurance operating subsidiaries of Alea Group (Bermuda), remain unchanged. The rating outlook remains stable, or is unlikely to change.

AM Best's comment follows the company's announcement of a $275 million initial public offering (IPO) and the future listing of the ultimate holding company, Alea Group Holdings (Bermuda) Ltd, on the London stock exchange.

Alea's lead investor Kohlberg, Kravis Roberts indicated earlier in the year that it was likely to sell off its investment in the group through an IPO during the fourth quarter of this year.

Meanwhile, AM Best said its reaffirmation of the group's financial strength rating was based on the prediction that a successful completion of the proposed IPO would mitigate current concerns regarding the strain on Alea's risk-adjusted capitalisation from its growth plans through 2005.

AM Best added that under the proceeds of the IPO "Alea plans to repay $50 million existing subordinate preferred stock".

The rating continues to recognise Alea's improving earnings ? 34.6 million at June 30, 2003 compared to 14.5 million for the same period in 2002and excellent business profile, said AM Best.