EOP Equity Office Properties Tru

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.