CHICAGO--(BUSINESS WIRE)-- Fitch Ratings expects to assign an 'A' rating to the $500 million senior unsecured note issuance planned by ACE INA Holdings Inc. (ACE INA), a subsidiary of ACE Limited (NYSE: ACE). The new notes will be fully and unconditionally guaranteed by ACE and are therefore based on ACE's 'A+' Issuer Default Rating (IDR). Fitch expects that the net proceeds from this new senior debt issuance will refinance roughly $466 million of existing debt maturing in 2009.

On May 19, 2009, Fitch affirmed all of its ratings for ACE and ACE's subsidiaries. The Outlook is Stable. (A full list of existing ratings follows at the end of this release.)

The anticipated rating action reflects ACE's continued favorable operating performance, solid balance sheet and financial flexibility, and diverse sources of revenues and earnings. Partially offsetting these positives is Fitch's expectation of continued pressure on investment performance related to the current economic instability, potential earnings volatility from catastrophe losses and variable annuity reinsurance, and the effect of significant competition in the company's chosen markets.


Following the completion of ACE's financing plans, the company's pro forma March 31, 2009 total debt to capital ratio will remain essentially unchanged at roughly 18% (equity-credit adjusted). Fitch views this as a reasonable amount of financial leverage for a company with ACE's cash flow and earnings profile. ACE's operating earnings-based interest coverage has been strong at 16.3 times (x) in the first quarter of 2009 and 14.9x in 2008. Fitch's expectation is that the company's interest coverage will continue to be favorable in the near-term.

Fitch believes that ACE's liquidity is strong. The company had $4.7 billion of cash and short-term investments at March 31, 2009. As of year-end 2008, ACE's regulated U.S.-domiciled operating company subsidiaries could pay $835 million of dividends in 2009, or 3.6x 2008's annual interest expense, without prior regulatory approval. There is also additional significant dividend capacity at ACE's Bermuda-domiciled subsidiaries. In 2008, Bermuda operating subsidiaries paid $1.7 billion to the holding company, primarily for the acquisition of Combined Insurance Company of America and its subsidiaries.

Fitch expects to assign the following rating:

ACE INA Holdings Inc.

-- $500 million senior notes 'A'.

Fitch currently rates the ACE Limited companies as follows:

ACE Limited

-- IDR 'A+'.

ACE INA Holdings Inc.

-- IDR 'A+';

-- $100 million senior debentures due 2029 'A';

-- $500 million senior notes due 2014 'A';

-- $450 million senior notes due 2015 'A';

-- $500 million senior notes due 2017 'A';

-- $300 million senior notes due 2018 'A';

-- $300 million senior notes due 2036 'A'.

ACE Capital Trust II

-- $300 Capital Securities due 2030 'A-'.

ACE American Insurance Company

ACE Bermuda Insurance Limited

ACE Fire Underwriters Ins. Company

ACE Indemnity Insurance Company

ACE Insurance Company of the Midwest

ACE Property and Casualty Insurance Company

ACE Tempest Reinsurance Limited

Atlantic Employers Insurance Company

Bankers Standard Fire & Marine Company

Bankers Standard Insurance Company

Combined Insurance Company of America

Combined Life Insurance Company of New York

Illinois Union Insurance Company


Indemnity Insurance Company of North America

Insurance Company of North America

Pacific Employers Insurance Company

Westchester Fire Insurance Company

Westchester Surplus Lines Insurance Company

-- Insurer Financial Strength Ratings (IFS) 'AA-'.

Century Indemnity Company

-- IFS 'B-'.

Century Reinsurance Company

-- IFS 'CCC+'.

The Rating Outlook is Stable.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.





Fitch Ratings

Gretchen K. Roetzer, +1-312-606-2327 (Chicago)

Mark Rouck, CPA, CFA, +1-312-368-2085 (Chicago)

Brian Bertsch, +1-212-908-0549 (Media Relations, New York)

brian.bertsch@fitchratings.com



Source: Fitch Ratings