Moody's Investors Service said it will not downgrade the financial strength rating of PXRE Reinsurance Company.
Moody's confirmed the "Baa1″ insurance financial strength rating of PXRE and the "Ba2″ ratings of PXRE Capital Trust I.
The actions concluded a review for possible downgrade that was initiated in September following the company's announcement of its initial loss estimates for Hurricane Katrina. The outlook on the ratings is stable.
Moody's said the confirmation reflects the Bermuda-based carrier's recent capital raising actions, including the issuance in early October of $115 million in common equity and an additional $375 million in perpetual preferred securities, which are expected to convert to common equity on Nov. 18.
Moody's noted that the company's recapitalization is expected to replenish the $433 million in estimated net losses incurred from Hurricanes Katrina, Rita and Wilma.
In addition to the recapitalization, Moody's said management is re-evaluating its risk management practices in light of the losses from the three storms.
Moody's said the stable outlook reflects PXRE's substantial capital raising and expertise in the catastrophe reinsurance market, as well as Moody's expectation that the company will benefit from significant rate increases in its assumed reinsurance business during 2006.
Moody's said it also expects that the company would take appropriate action should estimated losses from the hurricanes be revised upward or if it incurs losses from additional storms.
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