Fitch Upgrades Montpelier Re's Insurance Rating to 'BBB+', MRH debt to 'BBB-'.CHICAGO -- 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. today upgraded the senior debt rating of Montpelier Re Holdings Ltd. (NYSE NYSE See: New York Stock Exchange :MRH MRH Memory Repeater Hub MRH Main Rotor Head (helicopters) MRH Multi-Resolution Homogenization MRH Mastic Roller Hybrid MRH Mataillos Rejuntaos de Hafen (MMO gaming guild) ) to 'BBB-' from 'BB+'. At the same time, Fitch upgraded MRH's long-term issuer default rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) to 'BBB' from 'BBB-'. Fitch also upgraded the insurer financial strength (IFS) rating of Montpelier 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. Ltd. (Montpelier Re) to 'BBB+' from 'BBB'. The Rating Outlook is Stable. The rating actions follow a re-evaluation of Montpelier Re at the conclusion of the 2006 hurricane season which ended Nov. 30. Fitch believes Montpelier Re has successfully implemented its plan to revise its risk profile. The company has implemented new probable maximum loss Probable Maximum Loss (PML) The anticipated value of the largest loss that could result from the destruction and the loss of use of property, given the normal functioning of protective features (firewalls, sprinklers, and a responsive fire department, among others, in the and aggregate loss limits by zone, and as a percent of capital. Montpelier Re has also purchased increased reinsurance protection from the traditional reinsurance markets and through the use of a catastrophe bond catastrophe bond A debt security with a payoff tied to the relative severity of a natural disaster such as a hurricane or earthquake. Bondholders are paid with insurance premiums but may have to accept reduced principal repayment in the event the specified sold to the capital markets in late 2005. As a result, Fitch believes Montpelier Re has significantly reduced the volatility of its operating earnings. The upgrades also consider Montpelier Re's replenishment of capital lost in the 2005 hurricane season and its success in the June 1 to July 1, 2006 renewal season. The rating actions reflect Montpelier Re's strong year-to-date earnings though Fitch does recognize that the property reinsurance industry as a whole has reported strong earnings in 2006 due, in part, to a relatively benign year for natural catastrophes. Additionally, Montpelier Re has been able to retain its customer base and benefit from strong demand for property reinsurance. Although year-to-date gross premium has declined relative to 2005, this is partially the result of a shift in the book of business from quota share to excess of loss business, tighter risk-to-capital constraints and a curtailment of writings in offshore marine property which have more than offset pricing increases. Fitch further notes that Montpelier Re has raised an additional $200 million of capital - $100 million in a trust preferred offering in January and $100 million in a private common stock sale in May - which Fitch considers to be positive. Montpelier Re also secured an additional $180 million of soft capital in the form of a forward equity sales agreement. Additionally, Montpelier Re earned $180.8 million of net income through Sept. 30, 2006 and retained $157 million of it after dividends. Ratings upgraded with Stable Outlook: Montpelier Re Holdings Ltd. -- Long-term issuer default rating upgraded to 'BBB' from 'BBB-'; -- $250,000,000 6.125% senior notes due Aug. 15, 2013 upgraded to 'BBB-' from 'BB+'. Montpelier Reinsurance Ltd. -- Insurer financial strength rating upgraded to 'BBB+' from 'BBB'. 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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