Research and rating firm Standard & Poor?s yesterday assigned assigned a preliminary ?BBB+? senior debt, ?BBB? subordinated debt, and ?BBB-? preferred stock ratings to IPC Holdings Ltd.?s universal $1.25 billion shelf registration.

The ratings were placed on negative credit watch, meaning a downgrade has not been ruled out.

And, the ?A+? counterparty credit and financial strength ratings issued to IPCRe Ltd. and IPCRe Europe Ltd. will remain on negative watch, S&P said.

S&P said the Bermuda property-catastrophe reinsurer could see losses from Hurricane Katrina equal to two years? worth of earnings, and was concerned that the loss could be significant enough to dent capital.

IPCRe on Friday said it expected losses of between $650 and $750 million from Hurricane Katrina, which hit in August, and Rita, which hit in September.

Also on Friday, the company filed with the US Securities and Exchange Commission ? which has temporarily eased rules on insurers wanting to raise funds in the capital markets ? to periodically sell up to $1.25 billion in debt securities, or common and preferred shares.

The company may need to raise capital because of the size of its expected third-quarter catastrophe losses, which are equal to between 37 percent and 43 percent of $1.74 billion in shareholders? equity at June 30.

Standard & Poor?s and other rating agencies, including Oldwick, New Jersey-based AM Best, have put the ratings of numerous Bermuda insurers and reinsurers on negative watch because of capital adequacy concerns following significant claims from Hurricane Katrina.

Standard & Poor?s credit analyst Damien Magarelli said in reviewing IPC?s ratings, the firm took into account the company?s ?competitive position in the Bermuda reinsurance market, its very strong operating performance, a strong and consistent management team, and strong capitalisation?.

Mr. Magarelli added: ?Financial flexibility is also strong ? highlighted by IPCRe?s ability to raise additional capital following the World Trade Center disaster.?

S&P said IPCRe?s positive factors were partly offset by the company?s narrow business focus, with it predominately selling property-catastrophe reinsurance.

As well, S&P said it also took into account that IPCRe buys relatively little reinsurance protection and on the investment side, has an equity allocation greater than some of its peers.

In 2004, IPCRe generated the majority of its written premiums, 87 percent, from excess of loss property-catastrophe reinsurance, or coverage for low-frequency high-severity events.

Also differentiating IPCRe from its peers is its equity allocation, with 23 percent of its total invested assets in equities, including hedge funds.

?The CreditWatch on IPCRe reflects that Hurricane Katrina losses are expected to measure a significant portion of capital and likely well above two years worth of earnings,? Mr. Magarelli said.

IPC?s shelf filing and potential capital issuance might mitigate these concerns, S&P said, but did not rule out the prospect of a one notch downgrade if concerns were not adequately addressed.