Moody's Investors Service became the second rating firm today to rate a planned $300 million offering of Renaissance Re Holdings Ltd. shares.

Moody's Investors Service in New York gave the proposed offering a Baa3 rating or a "medium" rank--the lowest of its investment grade ratings. "It's deeply subordinated in the company's debt structure," explained analyst Pano Karambelas.

Bermuda-based RenRe in its announcement said the sale involves 6.60 percent Series D Preference Shares, with a liquidation preference of $25 per share.

Yesterday A.M. Best Co. in Oldwick, N.J. assigned a "triple-b-minus" or "very good," its lowest investment grade rank to the shares.

RenRe said it expects to consummate the sale to the underwriters on Friday. Proceeds from the offering are expected to be used to pre-fund $150 million of 8.10 percent Series A preference shares (which the company plans to redeem in December 2006) and $85 million of 8.54 percent trust preferred securities (planned redemption in the first quarter of 2007

Moody's said the offering represents a drawdown from the company's existing shelf registration. RenRe's Preference Shares are optionally redeemable after five years and under certain circumstances before five years. Moody's said the outlook for the ratings is stable.

Because of equity-like features in the Preference Shares, Moody's said it was giving them "Basket B" treatment on Moody's Hybrid Debt-Equity Continuum, and will consider them to be 25 percent equity and 75 percent debt for financial leverage calculations.

According to Moody's, RenRe's ratings reflect the company's leadership position in the international property catastrophe reinsurance market and its core underwriting and risk management capabilities.

It said that the firm's efficient operations, its successful risk selection and underwriting strategy, its active management of retrocessions, and its modest tax burden, reflecting its Bermuda domicile all contribute to RenRe's earnings strength and consistency.

However, it noted that these strengths are tempered somewhat by the company's concentration in the volatile property catastrophe business, its complex risk profile, and an active capital management strategy which contributes to variability in its risk and leverage profile.

Moody's most recent rating action on RenRe was Nov. 2, 2005, when the company's ratings were downgraded following RenRe's announcement that its then chairman and chief executive officer had resigned in light of regulatory investigations resulting from the company's restatements of its financial results earlier in 2005, and following losses from the 2005 storms.

Best has affirmed an "A" financial strength rating for the holding company while upgrading various issuer credit and debt ratings.

Best said the ratings for RenRe and its operating companies reflect continued strong capitalization and a historical record of exceptional underwriting and risk management in spite of taking over $1 billion in losses from 2004 and 2005 hurricanes.

The rating agency said it also considered the stability of RenRe's management since the turnover experienced in November 2005 after the Securities and Exchange Commission sent Wells Notices to RenRe executives indicating that the agency intended to recommend a civil enforcement action be brought against them related to company accounting practices.

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RenRe Securities Offering Rated By Moody's

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