S&P Revises W.R. Berkley Corp., Sub Ratings to Stable

July 20, 2005

Standard & Poor’s Ratings Services has revised its outlook on W.R. Berkley Corp. and BER’s operating companies (collectively referred to as Berkley) to stable from negative.

Standard & Poor’s also said that it assigned its ‘BBB-‘ rating to BER’s proposed $200 million subordinated 40-year debenture issue to Berkley Capital Trust II and the trust preferred securities with identical terms issued by Berkley Capital Trust II.

In addition, Standard & Poor’s affirmed its ‘BBB+’ counterparty credit rating on BER and its ‘A+’ counterparty credit and financial strength ratings on Berkley.

BER intends to use the net proceeds to redeem on or after Dec. 15, 2006, in whole or in part, its 8.197% junior subordinated debentures due 2045, with any remaining amount used for general corporate purposes.

“The revised outlook reflects our belief that the very strong earnings from BER’s well-diversified, strongly positioned subsidiaries and strong liquidity will continue to offset strong but below-rating-level capital adequacy and somewhat aggressive financial leverage,” said Standard & Poor’s credit analyst Steven Ader.

In addition, there is modest potential that given prior-year reserve additions in the past three years and the long-tail profile of BER’s business, the profitability of the recently booked business might not be as strong as currently reported.

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