S&P Assigns ‘A+’ Rating to RAM Holdings Debt

March 26, 2004

Standard & Poor’s Ratings Services announced that it has assigned an “A”+” rating to RAM Holdings Ltd.’s (RAM Holdings) $40 million debt offering.

S&P explained that the “operating performance and dividending capabilities of RAM Holdings’ primary subsidiary, RAM Reinsurance Co. Ltd. (RAM Re; AAA/Stable/–), provide the basis upon which Standard & Poor’s assigns the debt rating to RAM Holdings.” It added that the ratings on the company are “stable.”

“RAM Holdings will downstream the proceeds to RAM Re to support increased treaty participations and special facultative cession resulting from the change in Standard & Poor’s soft capital criteria in 2003 and the withdrawal of some reinsurers from the financial guaranty market,” said the announcement. “RAM Re’s statutory capital will increase to approximately $270 million, and its margin of safety, the principal measure of capital strength in the bond insurance industry, will likely remain in the 1.3x to 1.4x range once Standard & Poor’s completes a year-end 2003 review.

“RAM Holdings’ pro forma debt-to-capital ratio and earnings coverage ratio for Dec. 31, 2003, are approximately 12 percent and 14x, respectively. By Dec. 31, 2007, Standard & Poor’s projects the debt-to-capital ratio to decline to approximately 7 percent.”

S&P said it “bases its stable outlook for RAM Holdings’ debt rating on RAM Re’s sound capital position, well-managed reinsurance strategy, and conservative underwriting and risk-management functions.”

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