S&P Sees No Change in Odyssey Re Ratings

July 8, 2004

Standard & Poor’s Ratings Services announced that its ratings on Odyssey Re Holdings Corp. (ORH) and related subsidiaries, will not be affected by the recent announcement of ORH’s proposed acquisition of Overseas Partners U.S. Reinsurance Co., Opus Re, (See IJ Website July 7).

S&P noted that Opus Re has been in run-off since 2002, and that its book of business consists primarily of P/C reinsurance business written in 2001 and 2002, with no exposure to liabilities before these years.

“The acquisition is relatively small, with Opus Re’s $161 million loss reserve base constituting about 4.5 percent of ORH’s $3.5 billion loss and loss adjustment expense reserves as of March 31, 2004,” said S&P. It also said it “expects the $43 million purchase price to be paid in cash, with no material change in the group’s financial leverage.

“ORH had stockholders’ equity of $1.4 billion and total assets of $6.6 billion as of March 31, 2004. The group’s operating performance remained strong through the first three months of the year, with a GAAP combined ratio of 95 percent and ROR of 9.3 percent.”

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