S&P lowers XL

Standard & Poor's said it lowered its counterparty credit and financial strength ratings on XL Capital Ltd.'s core operating companies to A from A+.

The agency also said that it lowered its counterparty credit rating on XL to BBB+ from A-.

The outlook on all these companies is negative.

"These rating actions reflect its belief that XL's prospective competitive position and resulting underwriting performance have diminished because of perceived franchise issues stemming from a string of material earnings and capital charges over the past several years," explained S&P credit analyst Steven Ader.

"Although XL remedied many of these issues this past summer, the material deterioration in the unrealized position of XL's investment portfolio in the third quarter has again pressured XL's market presence."

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