Fitch affirms Everest Re

Fitch Ratings said it affirmed the ratings of Everest Re Group, Ltd. and its subsidiaries following the company's announcement that it will take a $311 million pretax fourth-quarter charge related to its asbestos exposures.

The agency affirmed Everest Reinsurance Holdings, Inc.'s issuer default rating at A+, its 5.4% senior notes due 2014 and 8¾% senior notes due 2010 at A and its 6.6% junior subordinated debenture due 2037 at A-. Also affirmed were Everest Re Capital Trust's A- 7.85% trust preferred securities due 2032 and Everest Re Capital Trust II's A- 6.2% trust preferred securities due 2034.

The outlook is stable.

Fitch believes that Everest Group's asbestos survival ratio (a measure of reserve adequacy) has been historically low relative to its peers and industry averages and, therefore, a reserve charge of this magnitude is within the agency's current expectations. Fitch also believes that the company's projected 2007 year-end earnings will be more than sufficient to absorb the charge.

However, Everest Group's survival ratio remains below expectations relative to Fitch's benchmarks at the company's current AA- rating level, even including the fourth quarter charge. As a result, the agency said it will view capital conservatively with this in mind going forward.

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