Moody's rates XL Capital note A3

Moody's Investors Service said it assigned an A3 rating to the planned $325 million senior unsecured notes due 2027 to be issued by XL Capital Ltd.

The outlook is stable.

Proceeds from the offering will be used, together with available cash, to retire $825 million of the company's senior notes due 2009.

The agency said XL's ratings reflect the group's overall strong market positions in its principal operating segments and its diversified earnings streams by geography and line of business.

These fundamental strengths are tempered by the intrinsic volatility of XL's reinsurance businesses and certain insurance lines and by its historically weak profitability, which has led to moderate coverage of interest and preferred share dividends, Moody's said.

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