NU Online News Service, March 5, 12:00 p.m.EST

Hamilton, Bermuda-based insurer Arch Capital Group Ltd. says itwill acquire Ariel Re's Credit & Surety reinsurance operationsbased in Zurich, Switzerland.

Upon the closing of the transaction, Ariel Re's Zurich-basedteam will transfer to the Zurich office of Arch Reinsurance EuropeUnderwriting Ltd (Arch Re Europe).

Arch says the teams will be “fully operational with immediateeffect” to ensure “a seamless transition for service to bothclients and intermediaries.”

The company went on to say that Ariel Re's existing trade creditand surety portfolio will be reinsured by Arch Reinsurance Ltd.(Arch Re Bermuda), based in Bermuda.

Both Arch Re Europe and Arch Re Bermuda are rated “A-plus” byStandard & Poor's.

The closing of the transaction is subject to regulatoryapprovals and other customary closing conditions.

Terms of the transaction were not released.

Last week, Ariel Re's insurance and reinsurance operations wereacquired by Goldman Sachs. The group will operate as part ofGoldman Sachs Reinsurance Group.

Arch Capital, with more than $5 billion in capital as of the endof 2011, provides insurance and reinsurance on a worldwide basisthrough its wholly-owned subsidiaries.

Late today, Standard & Poor's says its rating of ArielReinsurance Co. Ltd. was not affected by the sale. The “A-minus”rating was placed on credit watch negative on March 1 with theknowledge that a transaction of this sort was already beingcomtemplated, the rating service says.

This story was updated at 4:16 p.m. EST with S&Pcomments.