Moody's rates XL Capital notes A2

Moody's Investors Service said it assigned an A2 rating to the proposed $300 million of senior notes due 2014 and $350 million of senior notes due 2024 to be issued by XL Capital Ltd. The outlook is stable.

The proceeds from the offering are expected to be used to redeem all of the outstanding zero-coupon convertible debentures due 2021.

Moody's said the company's A2 senior debt rating is based on the overall strong market positions of the group's principal operating segments - insurance, reinsurance and specialty financial services, including financial guaranty insurance and reinsurance, as well as by its diversified earnings streams in terms of both geography and business line. Additional credit strengths include the company's sound liquidity and capitalization underpinned by the company's major Bermuda-based subsidiaries which benefit from fairly modest dividend restrictions relative to Bermuda regulatory capital.

These fundamental strengths are tempered, Moody's said, by the intrinsic volatility of some of XL's reinsurance businesses and certain insurance lines, the company's marginal organic capital formation due to the events of Sept. 11, 2003, reserve strengthening relating to prior years, the current debt service burden and significant shareholder dividends.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.