S&P puts Fairfax Financial on watch

Standard & Poor's said it placed a number of its ratings on CreditWatch with negative implications, including its BB counterparty credit ratings on Fairfax Financial Holdings Ltd. and Crum & Forster Holdings Corp. and BB- counterparty credit rating on TIG Holdings Inc.

The agency said that these ratings were placed on CreditWatch negative in response to the announcement by FFH that it will delay filing its second-quarter financial statements, adding that the delay is being caused by the company's disclosure that it had discovered accounting errors dating back several years that could result in a drop in retained earnings and the refiling of prior financial statements.

S&P noted that the ratings on Fairfax and its operating subsidiaries are based on their improving competitive position, strong consolidated capitalization and improved financial flexibility, adding that offsetting these positive factors are the group's reserves, which are not an immediate concern but frequently have been strengthened and might require some further modest charges.

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