Swiss Re Group said today that to preserve its "AA" rating it is beefing up its capital with an infusion of three billion Swiss francs--$2.6 billion at current exchange rates--from billionaire investor Warren Buffett, after sustaining an estimated 2008 loss of one billion Swiss franc, translating into $860 million.
The Zurich, Switzerland-based company said its arrangements to secure capital from Mr. Buffett's Berkshire Hathaway Inc. are subject to shareholder approval, and that the firm will consider raising an additional two billion Swiss francs ($1.7 billion), subject to market conditions, for a total of five billion Swiss francs ($4.3 billion), counting Mr. Buffet's infusion.
In reaction, Standard & Poor's said it was putting the firm's ratings on CreditWatch with negative implications. It said the magnitude of additional write-downs, much of it on credit default swaps, by the company "and the resulting need to raise capital are outside of our expectations."
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