OREANDA-NEWS. Fitch Ratings has placed Brit PLC's (Brit) Long-term Issuer Default Rating (IDR) of 'BBB+' on Rating Watch Negative (RWN). At the same time, the subordinated notes issued by Brit rated 'BB+' have also been placed on RWN.

KEY RATING DRIVERS
The rating action follows the announcement of the expected sale of Brit to the Canadian financial services group, Fairfax Financial Holdings Limited (Fairfax), following a recommended cash offer through which the entire issued ordinary share capital of Brit will be acquired by Fairfax. The RWN reflects Fitch's uncertainty about whether ownership by Fairfax will constrain Brit's ratings. Fitch has not maintained a rating on Fairfax since November 2013.

In resolving the RWN on Brit, we will endeavour to update our view on Fairfax and the impact on Brit's ratings as part of the Fairfax group. In particular, we will assess the implications for Brit's capital management and assess the impact of any potential changes in Brit's investment strategy. We will also assess the perceived strategic importance of Brit to Fairfax.

RATING SENSITIVITIES
If we consider that ownership by Fairfax is credit negative, we will likely downgrade the ratings. If we consider Fairfax's ownership to be neutral, we will likely affirm the ratings. Fitch views an upgrade of Brit related to the acquisition as unlikely in the medium term.