XL explains downgrade confusion
Bermuda-based insurer XL Capital is in damage control mode after Fitch Ratings downgraded several companies using the XL brand.
XL Insurance is a significant player in the local industrial and commercial insurance market, with its operations in Australia boosted in July 2001 by the global purchase of Winterthur International’s business.
On Thursday Fitch Ratings in New York downgraded Security Capital Assurance (SCA) from B- to BBB, and its subsidiaries XL Capital Assurance Inc, XL Capital Assurance (UK) and XL Financial Assurance Ltd from A to BB.
In a statement from its Bermuda headquarters, XL Capital said it wants to “clear up confusion” because the affected companies aren’t really subsidiaries of XL.
SCA was floated in August 2006, and XL says while it owns 46% of SCA’s “common equity interest”, the value of its investment in the company has been reduced from $US117 million ($127 million) to nothing. But under a transition agreement, SCA is permitted to use the XL name until August.
SCA is an insurer with significant business in the collatoralised debt obligations, which are often linked to the ailing subprime market.
At December 31 XL Capital Ltd had consolidated assets of $57.8 billion ($62.7 billion).
Attempts by insuranceNEWS.com.au to contact XL Insurance’s Sydney-based Country Manager, Craig Langham, were unsuccessful.
XL Insurance is a significant player in the local industrial and commercial insurance market, with its operations in Australia boosted in July 2001 by the global purchase of Winterthur International’s business.
On Thursday Fitch Ratings in New York downgraded Security Capital Assurance (SCA) from B- to BBB, and its subsidiaries XL Capital Assurance Inc, XL Capital Assurance (UK) and XL Financial Assurance Ltd from A to BB.
In a statement from its Bermuda headquarters, XL Capital said it wants to “clear up confusion” because the affected companies aren’t really subsidiaries of XL.
SCA was floated in August 2006, and XL says while it owns 46% of SCA’s “common equity interest”, the value of its investment in the company has been reduced from $US117 million ($127 million) to nothing. But under a transition agreement, SCA is permitted to use the XL name until August.
SCA is an insurer with significant business in the collatoralised debt obligations, which are often linked to the ailing subprime market.
At December 31 XL Capital Ltd had consolidated assets of $57.8 billion ($62.7 billion).
Attempts by insuranceNEWS.com.au to contact XL Insurance’s Sydney-based Country Manager, Craig Langham, were unsuccessful.