Ace Affirmed, Outlook Neg.

S&P’s assigned its “BBB-” preferred stock rating to Ace Ltd.’s $500 million, 7.80 percent cumulative redeemable preferred shares, Series C offering. Ace may redeem these shares any time after May 30, 2008. S&P’s also affirmed its “BBB+” counterparty credit and senior debt ratings on Ace. In addition, S&P’s affirmed its “A+” counterparty credit and financial strength ratings on the insurance operations that make up the Ace Group.

The outlook on all these companies is negative, reflecting S&P’s belief that Ace’s financial leverage will remain at about 20 percent and its capital adequacy ratio will remain at least 145 percent. Conversely, Ace’s near-term earnings potential and financial strength will continue to be burdened by capital-management pressures, sizeable goodwill, and material exposure to credit risk.

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