paying ability rating of New Cap Re subsidiaries from single-B to Triple-C.

The rating applies to both New Cap Reinsurance Corp. Holdings Ltd. branches -- New Cap Re Corp. Ltd. (Australia) and New Cap Re Corp. Ltd. (Bermuda.

The lower rating was sparked by this week's appointments of a provisional liquidator to New Cap Re and its Bermuda subsidiary, and a voluntary administrator for the Australian subsidiary.

The financial position of New Cap Re remains unclear.

The company has not yet reported year-end 1998 results because continued uncertainty remains in the estimation of loss reserves due to deterioration of results in the 1997 underwriting year and large catastrophe losses in 1998.

The latest estimate is for a consolidated loss of $140 million for the full 1998 year, which would result in a capital level of around $50 million.

But that preliminary estimate is likely to erode further as more substantial claims are reported.