Bermuda’s XL Capital has issued a statement commenting on market rumors concerning its financial condition. The Company’s statement said that, “while it is generally not XL Capital Ltd’s policy to comment on market rumors,” it believes that in the “current circumstances it is appropriate to do so.”
The rumors – and they are just that – include speculation that massive investment losses may force XL to sell off a number of its units in order to avoid a possible failure, and, in the City of London at least, that some insureds are requiring extra financial guarantees before placing or renewing business with the Company.
XL said it “remains focused on operating its business and meeting the needs of its customers and is committed to taking actions as necessary to maximize value for its shareholders. In that regard, as can be expected in the current environment, the Company is continuing to explore value-enhancing opportunities available to it and is being assisted in that effort by one of its long-standing financial advisors, Goldman, Sachs & Co.
“Based upon the most recently available information, the Company anticipates that the estimated mark-to-market decline on its investment portfolio (comprised of changes in unrealized losses, other than temporary impairments and realized losses on securities sales) due to changes in credit spreads and interest rates since the end of the third quarter of 2008 to date would be largely in line with that reported for the third quarter of 2008.
“The Company notes that future market movements will occur between now and the end of the fourth quarter of 2008, and such movements will affect the mark-to- market on the investment portfolio that the Company will report for the fourth quarter of 2008.”
The bulletin also stated that XL “estimates that it will report approximately $200 to $220 million in net investment fund affiliate losses from its alternative investment portfolio for the fourth quarter of 2008 (covering September, October and November);”
Source: XL Capital – www.xlcapital.com
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