XL Says Its Investments Off By $1.2 Billion

Global insurer and reinsurer Bermuda based XL Capital Ltd. said it estimates that its investment portfolio lost from $1 billion to $1.2 billion in the third quarter.

The firm announced it expects a third quarter book value for its shares of from $21 to $22.50. Its estimate was as of Sept. 30. Total common share count on that date, was approximately 330.8 million the company said.

Meanwhile, the market value of the share's stood at $4.0l when trading closed yesterday on the New York Stock Exchange. A year ago it was selling for $81.25 a share.

The company said the XL's estimated book value was negatively impacted, although to a lesser extent, by the strengthening of the U.S. dollar versus other leading currencies during the period.

XL Chief Executive Officer Michael S. McGavick commented, "We are determined to provide investors with the information they need to assess the value of XL's shares. I believe that the preliminary estimates we have provided today will assist in these efforts."

He said the next time the company expects "to be able to provide further meaningful financial information is early next week" and he would be providing data during conference call scheduled for Tuesday. That discussion is scheduled for 8:30 a.m. Eastern Time.

The company said the call will be accessible through a listen-only dial-in number (877) 422-4657 or (706) 679-0474, Conference ID# 67852140 or through a live webcast at www.xlcapital.com.

Bank of America analysts, reacting to the announcement, noted that the company's stock "has been under extreme pressure, likely on fears of outsized investment losses leading to ratings downgrade pressure or a potential capital raise."

However, they said third quarter investment losses appeared lower than feared. by the market.

The bank noted that rating agencies actions are uncertain and unpredictable and mentioned that XL earlier in the year had raised more capital than was needed in hopes of an upgrade.

But the bank said it does not know "how rating agencies will react and they may still downgrade the company's ratings in spite of having more than enough capital for the current ratings.

This article was updated 1:49 p.m.