Validus Reinsurance Ltd. said today that the Bermuda reinsurerhas entered into a collateralized quota share retrocessionagreement with a newly formed Bermuda sidecar named Petrel ReLtd.

Petrel Re will assume a 75 percent quota share of certain linesof marine and offshore energy reinsurance contracts underwritten byValidus Re for the 2006 and 2007 underwriting years, Validus said.Other lines of business are expected to be added over time.

A sidecar is essentially a special purpose vehicle in whichthird-party investors, such as hedge funds or private equity funds,collaborate with an underwriter to provide additional capacity toexisting reinsurers for short-tail lines of business.

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