Bermuda-based PXRe yesterday saw further, and final, credit downgrades, after the reinsurer late on Tuesday asked major rating agencies to no longer keep the company on watch.

Rating firms A.M. Best Co. and Standard & Poor?s both lowered PXRe?s ratings, and also removed some ratings from watch, as management requested.

Oldwick, New Jersey-based A.M. Best said it had downgraded the financial strength rating on PXRe?s reinsurance units from B+ to B. At the level, A.M. Best ? the ratings of which are widely followed by reinsurance buyers ? considers the company?s ability to meet its obligations as ?vulnerable?, under its financial strength ratings system.

Reinsurers sell policies to insurers, helping to spread the risk contained in insurance policies sold to corporations and individuals. And ratings downgrades can call into question reinsurer?s business prospects.

A.M. Best Co., Standard & Poor?s and Moody?s Investor Services all cut PXRe?s ratings after the company in February doubled its estimate of how much it could pay in claims from damage in last year?s hurricanes.

PXRe lost about one-third of its clients after the downgrades, it said last week, and was forced to consider its future business prospects after the crippling downgrades. It has hired investment bank Lazard to advise it on options, including a possible sale.

Also yesterday, Standard & Poor?s lowered its counterparty credit rating on PXRe to ?B+? from ?BB-?, and also cut other ratings.

?The downgrades reflect our concern of the potential that the selective cancellation of reinsurance contracts by PXRe?s clients could result in PXRe?s exposures being concentrated in certain zones,? the firm said in a statement. Reinsurers generally sell policies across geographic zones to limit the chance of all their business being hit by claims.

Standard & Poor?s also cited concerns over the company?s ?materially diminished competitive position? which would leave it hard put to raise capital if it was hit by another wave of large losses, as was the case last year.

The ratings on PXRe Capital Trust I?s preferred stock, and its guarantor PXRe Corp., were not removed, Standard & Poor?s said, because the shares continue to be held by the public.

The reinsurer?s shares are traded on the New York Stock Exchange. In closing composite trading yesterday, the shares lost 11 cents, or 3.27 percent, to $3.25. The shares have traded in a range between $2.90 and $25.70 in the last year.