A.M. Best Comments on Montpelier Re Holdings Ltd.'s Newly Formed Syndicate.

OLDWICK, N.J. -- A.M. Best Co. has commented that the issuer credit rating (ICR) of "bbb-" and all debt ratings of Montpelier Re Holdings Ltd. (Montpelier Re) (Hamilton, Bermuda) (NYSE: MRH) are unchanged following the announcement that it has formed Lloyd's Syndicate 5151 and will subsequently enter into initiatives that are expected to increase Montpelier Re's distribution capabilities. Additionally, the financial strength rating (FSR) of A- (Excellent) and the ICR of "a-" of Montpelier Reinsurance Ltd. (Montpelier) (Hamilton, Bermuda) is unchanged. The outlook for all ratings is stable.

In addition to forming Lloyd's Syndicate 5151, which initially is expected to write a nominal amount of short-tail property/casualty business, Montpelier Re has established a U.S.-based managing general agency, Montpelier Underwriting Inc (MUI). MUI is expected to underwrite U.S. specialty business by utilizing the paper of Lloyd's Syndicate 5151.

These strategic decisions are expected to diversify Montpelier's business mix, geographic position and distribution capabilities while utilizing its existing systems to underwrite short-tail risks including those that are not materially catastrophe exposed. Senior management positions also have been filled at both Lloyd's Syndicate 5151 and MUI. Although these developments are not expected to require a significant amount of initial capital, A.M. Best believes that there is execution risks that are somewhat magnified in light of current market conditions that include price softening and competition.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.