Bermuda-based RVI Guaranty Co., Ltd., the insurer said yesterday.

The initial S&P rating follows a January announcement that Continental Casualty Co. (CNA), a subsidiary of CNA Financial Corp., will acquire a 50 percent stake from RVI owner Quantum Industrial Partners (QIP).

RVI is a licensed property and casualty insurer offering residual asset value insurance.

Residual value insurance protects against catastrophic decrease in asset value. It offers asset owners insurance on the market value of certain insured assets at specified points in time.

"This rating is significant when it comes to RVI's ability to attract business from its mainly financial institution clients,'' RVI senior vice president Tony Forster said.

"We expect it to have an appropriately positive effect on our 1997 premium volume, as brokers inform their clients of this investment grade rating which is unique among insurers dedicated to the residual value insurance business.'' Since 1990, RVI's premium volume has fluctuated between $10 million and $20 million.

"While not as evolved as might be expected for the rating category, S&P expects that the involvement of CNA will play a key role in its future development,'' the rating agency said.

The market for residual value insurance remains essentially untapped and CNA is expected to be offer numerous opportunities.

S&P described RVI's capital as "superior'' and expects it will be maintained at a minimum in the excellent range.

"Underwriting standards are considered conservative as evidenced by RVI's negligible realised loss experience to date of $3.4 million, $3.3 million of which was against two aircraft.

"RVI maintains a balanced book across various asset types including auto, general equipment (including rail), aircraft and real estate, and does not provide coverage on computers, telephone systems, satellites or other types of assets which have a high rate of technological obsolescence.'' S&P added that RVI's policies require insured assets be maintained in easily re-salable condition and provide for notice well in advance of a claim for early remarketing.

The QIP deal will increase RVI shareholders equity to over $100 million from the present $75 million.

QIP is the operating subsidiary of Quantum Industrial Holdings, one of seven Quantum funds.

Soros Fund Management, whose chairman is George Soros, is the principal investment advisory company of the Quantum group of funds.