Allied World Assurance Co. Holdings Ltd., which went public last week, plans to sell as much as $500 million in notes, Moody?s Investors Service said.

Bloomberg News reported yesterday the debt sale would be the company?s first, according to data compiled by the news service.

Moody?s assigned a rating of Baa1 to the senior unsecured debt of Bermuda-based Allied World, three levels above high-yield, or junk status.

Proceeds will be used to repay a bank loan issued in March 2005 that was used to fund a one-time cash dividend to shareholders, Standard & Poor?s said in a July 14 report.

Jamie Tully, a spokesman for Allied World at Citigate Sard Verbinnen in New York, wasn?t immediately available for comment.

Allied World, which was formed in Bermuda by American International Group Inc. and Chubb Corp. in 2001, raised $299 million in an initial public stock sale on July 11 to repay debt. The insurer sold 8.8 million shares at $34 each, the company said.

The debt ratings reflect the insurer?s ?market position as a specialty niche provider of property and casualty insurance and reinsurance, its low underwriting and financial leverage targets following its recent initial public offering and a high-quality investment portfolio,? said Jeffrey Berg, an analyst at Moody?s in New York, in a report dated yesterday.

Allied World, which sells property coverage only to businesses, was founded in November 2001 to help fill an insurance shortage after the September 11 terrorist attacks.

It was the last of the ?Class of 2001? Bermuda reinsurers to go public.

The company reported revenue of $366 million and net income of $98 million in the first quarter, Moody?s said.