A.M. Best Co. has affirmed the financial strength rating of A plus (superior) of Bermuda-based PartnerRe Group and its affiliated companies.

At the same time Best has assigned debt ratings of ?a minus? senior debt, ?bbb plus? subordinated debt and ?bbb? preferred stock to the shelf registration of PartnerRe Ltd. and PartnerRe Finance II Inc. and the existing debt of PartnerRe Ltd. and PartnerRe Capital Trust I.

Best has also assigned the debt rating of ?bbb plus? to the preferred securities of PartnerRe Capital Trust II and III?s shelf registration. The outlook for all ratings is stable.

Best said the rating reflects PartnerRe?s prominent position as a leading global multi-line reinsurance organisation offering diversified products and international market capabilities.

PartnerRe has achieved solid consolidated operating returns through its client-oriented strategy, specialised underwriting expertise, diverse risk portfolio and conservative reserving practices.

PartnerRe?s operating subsidiaries have access to capital support, in addition to reinsurance protection from Partner Reinsurance Company Ltd. (Bermuda). Reinsurance protection is provided through individual calendar year stop loss treaties. Each treaty covers all in-force, new and renewal business under contracts written by PartnerRe?s operating subsidiaries, said Best.

PartnerRe?s superior capitalisation and prominent market position enables the company to access the capital markets, said Best.

It added that debt offerings previously issued by PartnerRe have been used to support growth in the operating subsidiaries.

It said the current shelf filing will allow PartnerRe to periodically sell debt securities, trust preferreds, preferred and common shares, which will be used for working capital, capital expenditures, acquisitions or other general corporate purposes.

Best said it anticipates that any issuance under the shelf filings will be used judiciously to support additional growth and to maintain financial flexibility. PartnerRe?s debt-to-adjusted-capital is expected to remain in the mid-20 percent range with fixed charge coverage sustained in the high single digit range.

Partially offsetting PartnerRe?s positive rating factors is exposure to adverse loss development principally, for US casualty lines of business written from 1997 to 2001, said Best.

?Although relatively small in relation to PartnerRe?s consolidated loss reserve position, the adverse development in US casualty lines required reserve strengthening charges of approximately $90 million in 2002 and 2003, respectively,? said Best. ?A.M. Best anticipates additional adverse loss development for these lines of business and has included appropriate charges in both PartnerRe?s consolidated and PartnerRe US? risk-based capital models.

?Furthermore, PartnerRe?s earnings are susceptible to catastrophe exposure, which combined with the group?s modest use of retrocessional agreements, subjects PartnerRe to a higher degree of year-over-year earnings variability.?