TEXT-Fitch expects to rate Montpelier Re planned notes 'BBB+'

Oct 2 - Fitch Ratings expects to assign a 'BBB+' rating to Montpelier Re Holdings Ltd.'s

(Montpelier) planned issuance of 10-year senior unsecured notes. The rating on the planned issuance is equivalent to the ratings on Montpelier's existing senior unsecured notes.

Fitch expects that Montpelier will use the net proceeds from this offering to redeem the company's $228 million of 6.125% senior notes due 2013, and to use any remaining net proceeds for general corporate purposes. Montpelier intends, promptly upon consummation of the new offering, to deliver notice to holders of the 2013 notes of the redemption.

Montpelier's financial leverage could increase modestly following the completion of its refinancing plans, but Fitch expects that Montpelier's equity-credit adjusted debt-to-total capital ratio (18% at June 30, 2012, excluding unrealized gains on invested assets) to remain comfortably below 25%, a level that Fitch views as supportive of Montpelier's current rating category.

Fitch currently rates Montpelier's entities as follows, with a Stable Outlook:

Montpelier Re Holdings Ltd --Issuer Default Rating (IDR) at 'A-'; --$228,009,000 6.125% senior notes due Aug. 15, 2013 at 'BBB+'; --$150,000,000 8.875% non-cumulative perpetual preferred securities at 'BBB-'. Montpelier Reinsurance Ltd. --Insurer Financial Strength Rating at 'A'.

Montpelier Capital Trust III --$100,000,000 floating rate trust preferred securities due March 30, 2036 at 'BBB-'.

Additional information is available at '

'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research: --Insurance Rating Methodology (Sept. 19, 2012). Applicable Criteria and Related Research: Insurance Rating Methodology (New York Ratings Team)

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