Bermuda-based bond insurer Ram Holdings Ltd. said yesterday it is exploring ways to improve its capital position after Moody's put its financial strength rating on review for possible downgrade.

In a response to the Moody's action, Ram also said: "Due to market conditions, Ram does not expect to raise new capital at the present time."

Moody's said last Friday that it has placed the Aa3 insurance financial strength rating of Ram Reinsurance Company Ltd. on review for possible downgrade, because of the company's exposure to the sub-prime mortgage crisis.

Moody's said expected loss projections for risky mortgage backed securities and related collaterised debt obligation risk had implications for Ram's capital adequacy.

"Ram is pursuing a number of alternatives to improve its capital position, including seeking reinsurance and reducing its growth," Ram's statement read.

It added: "Ram's strategy remains subject to change, and there can be no assurance that Ram will be successful in improving its capital position within the timeframe required by Moody's or in maintaining its current rating from Moody's."