Moody's downgrades Swiss Re

Moody's Investors Service said it downgraded the ratings of Swiss Reinsurance Co. and its subsidiaries, including Swiss Re's senior debt rating to Aa3 from Aa2 and subordinated debt rating to A2 from A1 and Swiss Re America Holding Corp.'s guaranteed senior debt rating to Aa3 from Aa2 and guaranteed subordinated debt rating to A2 from A1.

The ratings - except for the Prime-1 short-term ratings, which were affirmed - were placed on review for further possible downgrade.

The agency said these rating actions follow the recent announcement by Swiss Re that it expects to report a net loss for the full-year 2008 of around CHF 1 billion and a reduction in shareholders' equity by 17% to 21% compared to the third quarter of 2008. These results will rapidly accelerate the deterioration in key financial metrics that had already occurred during the course of 2008 and had led to the assignment of a negative outlook, Moody's said.

The review for possible further downgrade reflects concerns over whether the group's future credit profile is likely to remain consistent with the expectations for an entity with its ratings, the agency said.

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