Bluepoint Assigned by Moody’s

Moody’s Investors Service announced it has assigned BluePoint Re Ltd. (BluePoint) an insurance financial strength rating of “Aa3.” The outlook is stable. The rating reflects the company’s strong capital base, conservative underwriting guidelines, rational business strategy and the market’s firm demand for financial guaranty reinsurance.

BluePoint has been recently funded with $300 million in equity from the company’s wholly owned parent, Wachovia Corp. (Wachovia). The company will underwrite all lines covered by the major primary monolines including U.S. public finance, structured finance and international securities. The company will follow conservative single risk limits and exercise heightened caution in underwriting healthcare, utility and project finance sectors.

Moody’s stated that it viewed BluePoint’s ability to secure several quota share treaties with major monolines prior to the start of operations as key to validating demand from the company’s customer base. Additionally, BluePoint has been able to secure a start-up portfolio of approximately $3 billion in quality business, which will provide the company an immediate earned premium stream.

Moody’s noted that although BluePoint’s rating receives no credit enhancement from Wachovia, BluePoint’s business outlook benefits from Wachovia’s commitment to not withdraw capital from BluePoint until at least October 2009. Furthermore, BluePoint will receive a limited degree of direct underwriting business from Wachovia, where it will write guarantees in support of select structured transactions in credit default swap form. In addition, Wachovia’s strong relationships with the primaries should generally benefit BluePoint.