Negative Rating Outlook Assigned to Monoline Reinsurers

July 30, 2002

Fitch Ratings assigned a negative rating outlook to a group of monoline reinsurers-ACE Guaranty Re Inc., Radian Reinsurance Company Inc., and AXA Re Finance S.A. The three are major reinsurers of financial guarantees.

The insurer financial strength ratings of the three companies remain “AAA.”

The negative rating outlook covers a one to two year horizon and reflects less favorable relationships and contractual terms with the companies’ major clients, as well as increased competition.

Fitch said a fourth monoline reinsurer RAM Reinsurance Company Ltd., which Fitch does not rate, also faces the same industry pressures. Those pressures include the changing nature of the monoline reinsurance industry as well as increased competition from both multiline and monoline reinsurers.

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