AM Best has assigned a debt rating of a to XL Capital's $300m 5.25% senior unsecured notes, due in September 2014.
The financial strength ratings of XL Capital and its subsidiaries, as well as the remaining debt ratings are unaffected, said the ratings agency.
The outlook for all the ratings is negative, reflected AM Best's concern with the sufficiency of XL Capital's consolidated capital base for the current rating given the recent premium growth and market expansion into insurance lines of business.
Proceeds from the offering will be used to redeem all of XL Capital's outstanding Liquid Yield Option Notes, due in 2021. As of 30 June 2004, the aggregate value of the outstanding option notes was approximately $315m, said the company.
The redemption of the option notes is expected to be completed within a reasonable time frame, said AM Best.
