Channel Re Formed; Receives Top Ratings

February 16, 2004

RenaissanceRe Holdings Ltd., Koch Financial Corporation, Partner Re Ltd. and MBIA Inc. have joined forces to create Channel Reinsurance Ltd., a new financial guarantee reinsurer based in Bermuda. The company immediately received financial strength ratings of “Aaa” from Moody’s Investors Service and “AAA” from Standard and Poor’s Ratings Services.

The ownership of the new company is as follows: Renaissance Re holds the largest share at 32.7%, Koch Financial, through its affiliate Koch Financial Re, owns 29.9%, Partner Re owns 20.0%, and MBIA owns 17.4%. Channel Re’s capitalization is approximately $366 million. The company will assume a portfolio of in-force business from MBIA of around $27 billion, and will participate in its reinsurance treaty and provide facultative reinsurance support. Following the assumption of the in-force business the Company will have total claims-paying resources of approximately $700 million.

Even though it’s a new company, Channel Re will be led by financial guarantee veterans. Former MBIA managing director, Michael Maguire, has been named President and CEO, responsible for operations of the company. MBIA’s former chairman and CEO, David H. Elliott has been named chairman of the new company’s Board of Directors.

“The unique structure of Channel Re’s preferential relationship with MBIA and the provision of long-term stable, highly rated reinsurance to MBIA are expected to produce attractive long-term returns for the investors,” Maguire stated. “With the Triple-A ratings from both Moody’s and Standard & Poor’s, as well as its large capitalization and strong investor group, Channel Re will provide MBIA with high quality reinsurance and increased capacity.”

RenRe’s CEO Jim Stanard commented: “We are very pleased to be involved with such a strong group of investors and believe Channel Re is well positioned to be a very successful financial guarantee reinsurer. The strategic relationship with MBIA allows Channel Re to rapidly deploy its capital by the assumption of an in-force portfolio, and gain the benefit of MBIA’s market leading expertise.”

Maguire has spent the last thirteen years at MBIA, where he held positions of increasing responsibility, most recently as head of the Emerging Markets Group. Prior to that, he oversaw the company’s insured portfolio and market risk management areas. In 1991, he spearheaded MBIA’s international expansion by opening its first overseas office in Paris and later oversaw Japan, Asia, Latin America and Global Securitization.

Elliott has over three decades of experience in the insurance and financial guarantee industries. He was chairman of the Municipal Bond Insurance Association, predecessor of MBIA Insurance Corporation, from 1976 to 1980 and from 1984 to 1986. With the formation of MBIA in 1986, he was appointed president and chief operating officer, then served as chairman and CEO from 1992 to 1999. He began his career at The Aetna Casualty and Surety Company in 1969 and quickly rose in the company to become the vice president in charge of the financial guarantee department. He acted as chairman of the Association of Financial Guaranty Insurers, the industry’s trade organization, from 1988 to 1990.

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