Fitch To Rate SCA's Hybrid Capital Preference Shares 'AA-'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. expects to assign an 'AA-' rating to Security Capital Assurance Ltd's (NYSE NYSE See: New York Stock Exchange :SCA (Single Connector Attachment) An 80-pin plug and socket used to connect peripherals. With a SCSI drive, it rolls three cables (power, data channel and ID configuration) into one connector for fast installation and removal. ) soon to be issued Fixed/Floating Series A Perpetual Non-Cumulative Preference Shares (the Series A Preference Shares). In addition, Fitch also affirms the 'AAA' insurer financial strength (IFS) rating assigned to XL Capital Assurance Inc. (XLCA XLCA Xl Capital Assurance, Inc. ) and XL Financial Assurance Ltd. (XLFA). The Rating Outlook for all entities is Stable. The Series A Preference Shares will be issued as perpetual securities with no fixed maturity date and will pay a fixed dividend rate until Sept. 30, 2017. After this point the shares will pay a floating rate based on three month LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus a margin that is expected to result in a step-up of 100 basis points (bps) over the initial fixed rate, based on current spreads. Dividends on the preference shares are non-cumulative. Based on Fitch's hybrid rating criteria, the Series A Preference Shares have a 100% equity component. Fitch will allocate 100% of the face amount to SCA's adjusted equity and 0% to debt in evaluating the company's financial leverage. Key features supporting the 100% equity credit accorded to the Series A Preference Shares include its ranking above common shares but below any future debt, its non-cumulative dividends, and its issuance as a perpetual security with no fixed maturity date. SCA's call option at any time after ten years is balanced by a replacement capital covenant not to redeem the Series A Preference Shares unless replaced by the issuance of similar equity-like securities. Upon issuance of the Series A Preference Shares, SCA's level of hybrid securities is expected to be comfortably within Fitch's stated 30% guideline maximum for hybrid securities as a percentage of an insurance holding company's total capitalization. Fitch expects to assign the following ratings: Security Capital Assurance Ltd -- Fixed/Floating Series A Perpetual Non-Cumulative Preference Shares 'AA-'; Fitch affirms the following ratings with a Stable Outlook: XL Capital Assurance Inc. XL Financial Assurance Ltd XLCA Capital Assurance (U.K.)Limited --Insurer financial strength of 'AAA'. Twin Reefs-Pass Through Trust --Long-term 'AA'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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