S&P Puts Le Mans Re on CreditWatch Developing Due to WTC Loss Estimates

October 17, 2001

Standard & Poor’s announced that it now considered its CreditWatch already in place on Le Mans Re to be “developing” rather than “positive” primarily due to its loss estimates from the World Trade Center disaster, which range between $38 and $54 million.

Le Mans Re is 51 percent owned by French insurer Les Mutuelles du Mans Assurances (MMA) and 49 percent by Bermuda-based XL Capital, but the companies have concluded an agreement for XL to purchase an additional 18 percent stake from MMA, which would give it a 67 percent share and control of the company, effective January 1, 2002.

Part of the purchase agreement is a commitment by XL and MMA to either furnish additional capital and/or additional reinsurance treaties to neutralize the impact of the September 11 losses.

S&P estimated that the impact of the disasters on Le Mans Re’s would reduce its capitalization by approximately 20 percent.

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