Standard & Poor's (S&P) this week affirmed its single-'A'-plus counterparty credit rating on PartnerRe Ltd. and its double-'A' counterparty credit and financial strength ratings on Partner Reinsurance Co. Ltd. and PartnerRe SA, which are PartnerRe Ltd.'s core insurance subsidiaries.

S&P also raised its counterparty credit and financial strength ratings on Partner Reinsurance Co. of US to double-'A' from single-'A'-plus because of its status as core to PartnerRe Ltd, but the ratings agency have said the outlook is negative.

The affirmations are based on the improved operating performance of the group of companies (collectively referred to as PartnerRe), their rapid rebound in capital adequacy following significant losses in 1999, and the good prospects for the franchise, with hardening markets in most of the segments in which the group is active.

Offsetting these positive factors are the weak operating performance of the growing U.S. franchise and the lower base levels of operating performance as a multi-line reinsurer relative to past periods.

PartnerRe continues to enjoy narrowed notching between the financial strength rating assigned to its operating companies and the senior debt rating on the holding company because of financial leverage and coverage characteristics well above the rating level.

PartnerRe's consolidated debt to capital was low at 9.6 percent as of June 30, 2001, with interest coverage at 15 times year-to-date 2001.

The raised ratings on Partner Reinsurance Co. of US reflects it being assigned core status to PartnerRe Ltd. Partner Reinsurance Co. of US carries the same name and operates in businesses consistent with those pursued by the group, with significant overlap of clients.

Although the operations are currently performing well below the rating level, Standard & Poor's expects its obligations to continue to be supported by the other members of the group based on implicit and explicit support as well as commitments of management.

Major Rating Factors include very strong capital adequacy and S&P said though weakened following the severity of 1999 catastrophe losses, PartnerRe's capital adequacy ratio has rebounded to 164% at year-end 2000. With stress modelling of charges for property catastrophe and financial guarantee exposures - as well as significant capital charges for non-cash assets - PartnerRe's quality of capital is high relative to that of its peers.

Another rating factor was PartnerRe's conservative balance sheet. S&P said that PartnerRe has maintained a very clean balance sheet, with low levels of non-investment-grade fixed assets, few higher-risk investments, and very low financial leverage.

S&P also affirmed its rating due to the company's consistent growth in premium. They said that PartnerRe continues to build its business franchise through the growth of property and specialty casualty risk underwriting in its key markets and that PartnerRe was building a solid business position and demonstrating market leadership in several of its key business lines.

S&P also said PartnerRe had assembled a good management team and was building core competencies in regional markets for deployment across the global organisation and the transition in CEOs from the founding CEO was smooth.

S&P also said that PartnerRe's diversification has succeeded in building the company to within the top15 global professional reinsurance franchises, and its operating performance has been good overall through this weak part of the market cycle.

Returns on revenue are expected to range from 10% to 13% during the next two years, with relatively weaker operating performance at the U.S. operation. Capital adequacy is expected to remain within the rating range, with debt leverage remaining modest.

And it will be a busy weekend for PartnerRe's Bermuda office as they are relocating from 106 Pitts Bay Road to new offices at Chesney House (at The Waterfront) at 96 Pitts Bay Road.

The offices will be closed from 1 p.m. on Friday and they will re-open for business on Monday.