S&P gives Renaissance preferreds BBB

Standard & Poor's said it assigned its BBB preferred stock rating to Renaissance Re Holdings Ltd.'s (A-/stable) $300 million issuance of series D perpetual preferred shares.

The agency said that the rating is based on the company's historically strong operating performance, capital adequacy, financial flexibility and competitive position, adding that offsetting these strengths are the company's considerable exposure to low-frequency and high-severity events, correlated risks between the operating company and some other holding-company investments and the expectation that RNR could be a negative outlier in catastrophic events.

The agency said it expects volatility within Renaissance Reinsurance Ltd.'s property catastrophe core line of business, however, volatility within other lines would be viewed with concern.

The perpetual preferred shares issuance is expected to pay-down existing trust preferred obligations of about $85 million and previously issued perpetual shares of $150 million, S&P said.

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