S&P's Trenwick Ratings On CreditWatch

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NU Online News Service, March 6, 10:40 a.m.EST?Standard & Poor's Ratings Services in New York hasplaced its "triple-C-minus" counterparty credit ratings onBermuda-based Trenwick Group Ltd. and its sub-holding companies,LaSalle Re Holdings Ltd. and Trenwick America Corp., on CreditWatchwith "negative" implications.

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S&P said its decision was based on its belief that thecompany's ability to restructure its senior debt to keep it out ofdefault is "remote."

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S&P also said it placed its "triple-C" counterparty creditand financial strength ratings on Trenwick America ReinsuranceCorp., Dakota Specialty Insurance Co. and LaSalle Re Ltd. TrenwickInternational Ltd. Insurance Corp. of N.Y. is on CreditWatch"negative."

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Following Trenwick's fourth-quarter 2002 reserve additions,tangible net worth at year-end 2002 is negative $49.7 million afterdeducting $127.2 million of deferred acquisition costs, S&Pnoted. Furthermore, the emergence of earnings and dividend capacityfor existing creditors in the near-term remains unlikely, thecredit agency said.

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S&P said the CreditWatch status will be resolved after theresolution of senior debt restructuring on April 1. The creditagency said it expects Trenwick to either default in payment on thedebt or restructure in a way that may be equivalent to adefault.

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Trenwick Group, a specialty insurance and reinsuranceunderwriting organization, operates five main subsidiaries.Trenwick America Reinsurance unit underwrites treaty reinsurancefor U.S. p-c insurers.

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Trenwick International offers treaty and facultative reinsuranceas well as specialty insurance, while Canterbury Financialreinsures p-c coverage in the United States through specialtyprogram administrators.

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Lasalle Re provides property-casualty reinsurance and focuses oncatastrophe coverage, while Chartwell Managing Agents, a member ofLloyd's of London, writes coverage including marine, motor,aviation and life. Trenwick Group had revenues of more than $1.1billion in 2002.

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