NEW YORK (Thomson Financial) - Shares of RAM Holdings Ltd. rose Monday after Moody's Investors Service confirmed its Aa3 insurance financial strength rating on RAM Reinsurance Co. with a negative rating. Moody's also confirmed its Baa1 rating on preference shares issued by Bermuda-based RAM Holdings Ltd, and A2 contingent capital securities rating of Blue Water Trust I, a related financing trust.
The rating outlook is negative, Moody's said, to reflect continued uncertainty regarding both the ultimate performance of mortgage and mortgage-related collateralized debt obligation exposures, as well as RAM Re's future underwriting prospects given its reliance on the primary financial guarantors for business.
Moody's said RAM Re remains adequately capitalized for its rating level, in part, because the company entered this difficult market environment with a relatively healthy capital position.
RAM said it is pleased that Moody's has confirmed its Aa3 rating and it is pursuing a number of alternatives to improve its capital position, including seeking reinsurance and reducing its growth.
'Due to current market conditions, RAM does not expect to raise new capital at the present time,' the company said.
RAM stock rose 5.2% to $1.43 in midday trading.
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