Fitch affirms Swiss Re

Fitch Ratings said it affirmed Swiss Reinsurance Co.'s long-term issuer default rating and insurer financial strength rating at AA-, along with its 6.13% mandatory convertible securities due 2007 rating at A+, Swiss Re Solutions Holding Corp.'s long-term issuer default rating at A+, 7% senior unsecured notes due 2026, 6.45% senior unsecured notes due 2019, 7 ½% senior unsecured notes due 2010 and 7 ¾% senior unsecured notes due 2030 all affirmed at A; Employers Reinsurance Corp.'s insurer financial strength rating at AA-; and Reassure America Life Insurance Co.'s insurer financial strength rating at AA-.

The outlook is stable.

The affirmation follows news that Swiss Re has written down CHF 981 million (after tax), from the value of two credit default swaps written by its Credit Solutions unit, Fitch said. The loss is primarily due to exposure to asset backed securities.

In spite of the write-down and sudden news of the exposure, Fitch said it has affirmed the ratings because it considers the size of the write-down to be immaterial to the group. The write-down and the continuing share buy-back program have combined, in Fitch's view, to reduce Swiss Re's capital adequacy.

Nevertheless, Fitch said it views Swiss Re's capital as continuing to support an AA- rating, should no more losses be incurred.

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