Fitch Rates PartnerRe's $250MM Junior Hybrids 'A'; Outlook Stable.

NEW YORK -- Fitch Ratings assigns an 'A' rating to PartnerRe Ltd.'s (PartnerRe) $250 million junior subordinated notes due Dec 1, 2066. The notes will pay a fixed rate of interest until Dec. 1, 2016 and pay a floating rate based on three month LIBOR plus a margin with quarterly resets thereafter. PartnerRe (NYSE:PRE) has the right to defer interest for up to 10 consecutive years. The notes may be redeemed by PartnerRe on or after Dec. 1, 2016 at par plus any accrued and unpaid interest; or before Dec. 1, 2016 if certain changes occur in tax laws or rating agency actions at certain redemption prices.

Fitch has also affirmed the 'AA' Insurer Financial Strength (IFS) rating of Partner Reinsurance, as well as the various ratings of Partner Reinsurance's parent company PartnerRe Ltd. (PartnerRe) including the 'A' ratings assigned to its cumulative redeemable preferred securities and the trust preferred securities of PartnerRe Capital Trust I. The Rating Outlook is Stable.

Based on Fitch's new hybrid rating criteria published on Sept. 27, 2006, the newly issued securities have a high equity component. Fitch has assigned a class D designation to the notes that will allocate 75% of the principal to adjusted equity and 25% to adjusted debt in evaluating the financial leverage of PartnerRe. Key features supporting the equity credit class of the notes include the junior subordinated ranking, 10-year deferral period, and a long maturity with no put provision.

Fitch expects that net proceeds from the issuance will be used for the redemption of all of the $200 million of the 7.9% trust preferred securities issued by PartnerRe Capital Trust 1 as soon as practicable after they become redeemable on Nov. 21, 2006. The remainder of the proceeds are expected to be used for general corporate purposes.

PartnerRe's pro forma equity-credited adjusted leverage was 10% at Sept. 30, 2006. Fitch views this as an acceptable level of financial leverage, considering PartnerRe's exposure to low frequency but high severity losses. Moreover, Fitch expects that PartnerRe's financial leverage will decline further after the company redeems its Trust Preferred securities in November 2006 or soon thereafter.

Fitch has assigned the following rating:

PartnerRe Ltd.

--$250 million junior subordinated notes 'A';

Fitch has also affirmed the following ratings with a Stable Outlook:

Partner Reinsurance Company

--Insurer Financial Strength (IFS) 'AA'.

PartnerRe Ltd.

--Issuer Default Rating 'AA-';

--$290 million 6.75% series C cumulative redeemable perpetual preferred securities 'A';

--$230 million 6.5% series D cumulative redeemable perpetual preferred securities 'A'.

PartnerRe Capital Trust I

--$200 million 7.9 trust preferred securities due Dec. 31, 2031 'A'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.