Standard & Poor's Ratings Services has placed Bermuda-based XL Capital Group on CreditWatch with negative implications citing reinsurance arrangements XL has with downgraded bond insurer Security Capital Assurance.

A company spokesperson did not immediately respond when asked for comment.

Standard & Poor's credit analyst Steven Ader, in a statement issued Friday, said S&P has a "concern that earnings, capitalization and financial flexibility might be adversely affected by the uncertainty surrounding XL's outstanding reinsurance agreements" and guarantee of business underwritten by the operating subsidiaries of SCA.

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