A.M. Best Affirms Rating for XL Capital Group; Assigns Debt Ratings.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--March 5, 2002 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A+ (Superior) for the core operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of XL Capital Ltd (NYSE NYSE See: New York Stock Exchange : XL), Bermuda, and the "a" rating on the $100 million 7.15% senior notes, due 2005, issued by NAC See network access control. Re Corporation, Stamford, Connecticut Stamford is a city in Fairfield County, Connecticut, United States. According to 2006 Census Bureau estimates, the population of the city is 119,261, making it the fourth largest city in the state. . Also, A.M. Best has assigned an "a+" debt rating to the existing senior debt obligations issued and guaranteed by XL Capital Ltd, and assigned indicative debt ratings to the recently filed universal shelf offering as indicated below. These ratings reflect XL Capital's global market capabilities, strong capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and well-recognized position as a leading provider of specialized insurance coverage. These strengths are derived from the group's focused operating strategy, disciplined underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. approach, strong risk management capabilities and experienced management team. Additionally, XL Capital maintains a distinct competitive advantage as a Bermuda-domiciled organization given its favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. regulatory environment. XL Capital maintains significant financial flexibility as demonstrated by the successful acceptance of recent offerings to the capital markets. Market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. at December 31, 2001, was approximately $12.5 billion. The group's financial leverage--while significantly elevated over the prior year's levels--remains commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with its current rating level at 25% debt and preferred to capital. Notwithstanding the significant losses incurred during 2001--as a result of losses emanating from the World Trade Center attacks and the exposures associated with Enron's bankruptcy--XL Capital has consistently generated favorable earnings, providing for strong coverage of its debt obligations. A.M. Best expects earnings to rebound in 2002, providing fixed charge coverage in the low double-digit range. Offsetting these positive factors are the ongoing competitive market challenges associated with the group's large account and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. segments, along with integration and financial risks associated with its large acquisitions in recent years. XL Capital carries a significant amount of goodwill associated with its acquisitions. The group is still experiencing adverse prior period loss development on its acquired U.S. casualty book of business, thus necessitating additional reserve strengthening in 2001. Additional risk is also imposed by XL Capital's structured finance products. However, strong capitalization and management's demonstrated ability to optimally manage risk mitigate these concerns. Accordingly, A.M. Best views the rating outlook as stable. At December 31, 2001, XL Capital Ltd reported total assets of $27.9 billion and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $5.4 billion. The financial strength rating has been affirmed at A+ (Superior) for the following core operating subsidiaries:
- XL Capital Group
- XL Europe (Ireland)
- XL Insurance Ltd (Bermuda)
- XL Re Ltd
- XL Reinsurance America Group
- XL Reinsurance America Inc.
- XL Insurance Company of New York
- XL Specialty Insurance Company
- Greenwich Insurance Company
- Indian Harbor Insurance Company
- Winterthur International America Insurance Company
- Winterthur International America Underwriters
The following debt rating is affirmed:
- NAC Re Corporation--
"a" rating on $100 million 7.15% senior notes, due 2005
The following debt ratings are assigned:
- XL Capital Finance (Europe) plc (guaranteed by XL
Capital Ltd)--
"a+" rating to $600 million 6.5% senior notes, due 2012
- XL Capital Ltd--
"a+" rating on $500 million zero coupon convertible
senior debentures, due 2021
"a+" rating on $250 million zero coupon convertible
senior debentures, due 2021
"a+" rating on $255 million 6.58% senior notes, due 2011
The following indicative ratings are assigned to debt securities
available under shelf registration:
- XL Capital Ltd--
"a+" senior debt rating
"a" subordinated debt rating
"a-" preferred stock rating
- XL Capital Finance (Europe) plc (guaranteed by XL
Capital Ltd)--
"a+" senior debt rating
- XL Capital Trust I, II & III (guaranteed by XL Capital
Ltd)--
"a" preferred securities rating
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. |
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