S&P keeps XL on watch

Standard & Poor's said its BBB- financial strength ratings on XL Capital Assurance Inc. and XL Financial Assurance Ltd. remain on CreditWatch with negative implications, following Security Capital Assurance Ltd.'s announcement on July 28 of a proposed $1.8 billion capital injection and 8 million share contribution by XL Capital Ltd. and the commutation of the credit default swaps totaling $3.74 billion that were in dispute with Merrill Lynch & Co. Inc.

As part of ongoing efforts to strengthen the financial condition of the companies, the agency said that it was also announced that XL Capital's management will continue discussions with swap counterparties to commute, terminate, or restructure the remaining credit default swaps portfolio.

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