A.M. Best Assigns Debt and Issuer Credit Ratings to XL Capital Ltd.OLDWICK, N.J. -- A.M. Best Co. has assigned respective debt ratings of "a-" to XL Capital Ltd.'s (XL Capital) (NYSE NYSE
See: New York Stock Exchange : XL) (Bermuda) $300 million 5.25% senior unsecured notes, due 2014 and $350 million 6.375% senior unsecured bonds Noun 1. unsecured bond - the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future
debenture, debenture bond , due 2024. Concurrently, A.M. Best has assigned XL Capital an issuer credit rating of "a-". The financial strength rating of A+ (Superior) and all remaining debt and operating company operating company
A business that engages in transactions with outsiders. issuer credit ratings of XL Capital Group and its subsidiaries are unaffected. All ratings have a negative outlook.
Proceeds from the offering will be used to redeem all of XL Capital's outstanding Zero Coupon Convertible Debentures Convertible Debenture
Any type of debenture that can be converted into some other security.
For example, a convertible bond can be converted into stock. (CARZ) due in 2021. At September 30, 2004, the aggregate value of the outstanding CARZ was approximately $655 million. The redemption of the CARZ is expected to be completed within a reasonable timeframe.
Following the issuance of the senior notes and redemption of the CARZ, XL Capital's debt-to-capital will remain commensurate com·men·su·rate
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 debt rating level in the mid-20% range. The coverage ratio for 2004 is expected to be in the high single digit range.
Through the nine months ended September 30, 2004, XL Capital produced a combined ratio of 96.1% on its insurance/reinsurance operations including hurricane losses of $420 million. 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. has grown to $7.4 billion at September 30, 2004, from $6.9 billion at December 31, 2003. XL Capital continues to maintain a well-recognized position as a leading global provider of specialized insurance 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. coverage.
The negative outlook is based on A.M. Best's concern with the sufficiency of XL Capital's consolidated capital base for the current rating given the recent premium growth and market expansion into insurance lines of business.
The following debt ratings have been assigned with a negative outlook:
XL Capital Ltd.--
-- "a-" on $300 million 5.25% senior unsecured notes, due 2014
-- "a-" on $350 million 6.375% senior unsecured bonds, due 2024
An issuer credit rating of "a-" with a negative outlook has been assigned to XL Capital Ltd.
For current Best's Ratings Best's rating
A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , independent data and analysis on more than 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc.
For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debtratings/.
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 http://www.ambest.com.