A.M. Best Assigns Ratings to XL Capital Limited's Shelf Registration and Comments on Existing Ratings.OLDWICK, N.J. -- A.M. Best Co. has assigned indicative debt ratings of "a-" to senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. , "bbb+" to subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and "bbb" to preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. that can be issued under XL Capital Limited's (Bermuda) (NYSE NYSE See: New York Stock Exchange : XL) universal shelf registration filed today. The ratings are under review with negative implications, consistent with XL Capital Group's (XL Capital) (Bermuda) ratings described below. In addition, A.M. Best commented today on XL Capital's announcement regarding the draft report from the independent actuary in its dispute with Winterthur Swiss Insurance Co. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its acquisition of Winterthur International in 2001. As a result of the independent actuary report, XL Capital will likely record a net charge of approximately $830 million in the fourth quarter of 2005. Despite this charge, XL Capital's financial strength rating of A+ (Superior) and its issuer credit ratings of "aa-"and the existing debt ratings of XL Capital Limited remain unchanged at this time. However, these ratings were previously placed under review with negative implications in September 2005, following the group sustaining $1.5 billion in after tax losses in 2005 from the cumulative impact of hurricanes Katrina and Rita and other third quarter natural catastrophes. As part of the under review process, A.M. Best will assess these various charges and XL Capital's total recapitalization plan, which will include increasing capital by $2.8 billion and entering into a quota share agreement with a newly-formed Bermuda reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. (Cyrus Re) with regard to some of the group's property catastrophe and retrocessional exposures. Further, A.M. Best will also consider XL Capital's ongoing earnings capability in light of the anticipated improvement in the property 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. segments. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 330 reinsurance companies, please visit www.ambest.com/reinsurance. 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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