Moody's rates Endurance preferreds Baa3(hyb)

Moody's Investors Service said it assigned a Baa3(hyb) rating to $230 million of series B preferred shares to be issued by Endurance Specialty Holdings Ltd.

The company has a senior debt rating of Baa1.

The outlook is stable.

The preferreds are perpetual, non-cumulative and are callable by the company after five years, Moody's said.

The proceeds will be used for general corporate purposes, including potential repurchases of the company's outstanding debt and to support the underwriting activities of its operating subsidiaries, the agency said.

Endurance said it expects to incur between $45 million and $55 million of pre-tax net losses from the April 2011 tornadoes in the southeastern United States, Moody's said.

The ratings reflect the company's established business platform, its good spread of risk in international insurance and reinsurance and its strong earnings performance and internal capital generation to date, the agency said.

Its core strengths are tempered by the company's underwriting focus in highly cyclical specialty insurance and reinsurance sectors, Moody's said, and by the inherent underwriting volatility in many of these specialty lines.

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