A.M. Best Places Rating of Real State Insurance Corporation Under Review

  
    
  
  
    
      A.M. Best Co. has placed the financial strength rating (FSR) of 
      A- (Excellent) of Real State Insurance Corporation (Honolulu, HI) 
      under review with negative implications.
    
    
      This rating action follows the announcement of the leveraged buyout 
      (LBO) of Real State’s ultimate parent, Equity 
      Office Properties Trust (Equity Office) [NYSE: 
      EOP], by The Blackstone Group (Blackstone). 
      The deal contemplates Blackstone paying $48.50 per share for Equity 
      Office stock for a total deal value of $36 billion. The payment 
      represents a $20 billion purchase price with the assumption of $16 
      billion of debt. This LBO qualifies as the largest in U.S. history and 
      the world’s largest private equity deal.
    
    
      The placing of Real State’s rating under 
      review is due to the potential that the financial leverage of the new 
      entity may be excessive and that the captive’s 
      future business activities are unknown at this time. Real State’s 
      rating will be updated when more definitive information regarding the 
      captive’s role, the credit rating of Equity 
      Office, or a successor organization is solidified.
    
    
      Real State provides various property/casualty coverages to Equity 
      Office. The pure captive does not write any third party risks; 
      therefore, the rating of Real State is heavily influenced by the 
      financial strength of Equity Office. Additionally, Real State currently 
      has a relatively large loan-back of equity to its parent organization. 
      The details of how this will be handled by the new organization is 
      important to A.M. Best since it will impact any future rating decisions 
      A.M. Best makes regarding Real State.
    
    
      For Best’s Ratings, an overview of the rating 
      process and rating methodologies, please visit www.ambest.com/ratings.
    
    
      For current Best’s Ratings and independent 
      data on the captive and alternative insurance market, please visit www.ambest.com/captive.
    
    
      A.M. Best Co., established in 1899, is the world’s 
      oldest and most authoritative insurance rating and information source. 
      For more information, visit A.M. Best’s Web 
      site at www.ambest.com.
    
  
A.M. Best Co. has placed the financial strength rating (FSR) of A-
(Excellent) of Real State Insurance Corporation (Honolulu, HI) under
review with negative implications.

   This rating action follows the announcement of the leveraged
buyout (LBO) of Real State's ultimate parent, Equity Office Properties
Trust (Equity Office) (NYSE: EOP), by The Blackstone Group
(Blackstone). The deal contemplates Blackstone paying $48.50 per share
for Equity Office stock for a total deal value of $36 billion. The
payment represents a $20 billion purchase price with the assumption of
$16 billion of debt. This LBO qualifies as the largest in U.S. history
and the world's largest private equity deal.

   The placing of Real State's rating under review is due to the
potential that the financial leverage of the new entity may be
excessive and that the captive's future business activities are
unknown at this time. Real State's rating will be updated when more
definitive information regarding the captive's role, the credit rating
of Equity Office, or a successor organization is solidified.

   Real State provides various property/casualty coverages to Equity
Office. The pure captive does not write any third party risks;
therefore, the rating of Real State is heavily influenced by the
financial strength of Equity Office. Additionally, Real State
currently has a relatively large loan-back of equity to its parent
organization. The details of how this will be handled by the new
organization is important to A.M. Best since it will impact any future
rating decisions A.M. Best makes regarding Real State.

   For Best's Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.

   For current Best's Ratings and independent data on the captive and
alternative insurance market, please visit www.ambest.com/captive.

   A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit A.M. Best's Web site at www.ambest.com.