Yesterday's announcement that XL Capital Ltd. would sever its financial commitments to Security Capital Assurance Ltd. (SCA) is not sitting well with rating agencies as the insurer also announced it will be going through a companywide alignment.
The news from the Hamilton, Bermuda-based firm comes as it reported net income for the second quarter fell 57 percent.
Today, all four major rating agencies–A.M. Best, Fitch, Moody's and Standard & Poor's–reacted negatively to the deal that will have XL Capital end its relationship with SCA in a transaction where XL would pay the bond insurer $2 billion in cash and stock to terminate reinsurance agreements between them and commutate six existing contracts.
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