Bermuda reinsurer Axis Capital yesterday was assigned a ?BBB-? preferred stock rating by ratings firm Standard & Poor?s on its proposed sale of $200 million in preferred shares.

S&P also affirmed its ?BBB+? counterparty credit rating on Axis Capital, the group?s holding company, as well as its ?A? counterparty credit and financial strength ratings for operating unit, Axis Specialty Ltd. and other subsidiaries.

The outlook on all these companies remains stable, meaning the ratings are unlikely to change.

Axis? plans to issue $200 million in preferred shares follow its issuing $200 million in common equity on Wednesday.

As a result of the capital raising, S&P said it expects Axis? year-end capital adequacy ratio to improve, and it should ?about break-even? or avoid posting a significant loss, when it records its 2005 operating results.

S&P, in a statement, said its ratings actions considered Axis? seasoned management, its strong competitive position, and ?very strong? capital position and operating results through the second quarter of this year.

It also praised Axis for its manageable catastrophe losses under record losses during the third quarter, following a wave of powerful hurricanes making land, including Hurricane Katrina?s onslaught of the US Gulf Coast region.

S&P said Axis?s positive factors were partially offset by its ?relatively short track record?, with the company forming in late 2001, and its sale of insurance and reinsurance policies at high risk of significant losses.

The insurance industry, particularly those that sell property-catastrophe policies, could collectively be hit by up to $80 billion in claims after unprecedented storm activity this year in the Atlantic and Europe, and natural catastrophes elsewhere.

In the third quarter, Axis saw net losses of $805 million from Hurricanes Katrina and Rita. The losses led the group to report a $468 million third-quarter net loss. S&P analyst Laline Carvalho said the losses were ?substantial? but ?reasonable? given the group?s sale of property, marine, and energy lines ? all areas hit by claims from the 2005 hurricane season.

And she said the fact that Axis sold a large number of short-tail contracts ? policies that are generally settled in a year or two ? was taken into account as a positive factor. Some types of insurance and reinsurance ? most casualty policies ? are considered ?long-tail? meaning claims can take time, sometimes decades, to settle.