Bermuda-based Empyrean Re Ltd.'s first complete year in business has been followed by an affirmation of its financial strength rating from credit rating agency AM Best.

Empyrean, which is part of the Man Group, is a trade credit reinsurer which was set up with $150 million of equity capital in 2006.

Best yesterday announced it had affirmed Empyrean's financial strength rating of A- (excellent) and the issuer credit rating of "a-" . The outlook for both ratings is stable.

The ratings are based on the company's excellent capitalisation, experienced management team and sound business plan, Best said. These strengths are partially offset by the untested start-up nature and the mono-line orientation of the company.

The ratings consider the company's solid risk-adjusted capital level that has met Best's stringent requirements for newly formed companies.

Best sated: "Empyrean writes direct, reinsurance and retrocessional trade credit coverage produced through the broker market. Though indications of market acceptance are positive following the company's first year of operations, the ability of Empyrean Re to effectively build and establish a successful market presence can only be proven over time.

"While the company is effectively implementing its business plan, Best recognises the continued execution risk inherent in the start-up of a specialist reinsurance company that writes only one line of business.

"It also views any concentration of invested assets as a source of potential problems. However, these concerns are partially mitigated by the experienced management team, as well as the low underwriting leverage contemplated in Empyrean Re's business plan and the anticipated support of Man Group plc.

The London-based Man Group, a provider of alternative investment products, had $72 billion of funds under management, as of January this year.