AM Best has assigned a financial strength rating (FSR) of A- (Excellent) and an issuer credit rating (ICR) of “a-” to Peleus Reinsurance Ltd (Peleus Re). Concurrently, it has assigned FSRs of B+ (Good) and ICRs of “bbb-” to Peleus Re's sister companies, PXRE Reinsurance Company and PXRE Reinsurance Limited. AM Best has also assigned an ICR of “bb+” to the holding company, PXRE Group Ltd (PXRE).

Commenting on the proposed merger of PXRE and Argonaut, which is creating new Bermudian start-up reinsurer Peleus, AM Best said in a separate statement it “believes that the combined entity will leverage the strengths of both operations, which should allow the organisation to grow in its existing markets, expand its product offerings, as well as recognise various synergies and cost savings.”

The assigned ratings reflect Peleus Re's solid capitalisation, prudent business plan, as well as its extensive experience and proven track record of senior management. The ratings also reflect the announced merger, which is expected to close by the end of third quarter 2007, subject to shareholder and regulatory approvals. Upon completion of the merger, PXRE will be renamed Argo Group International Holdings Limited (Argo Group), headquartered in Hamilton, Bermuda.