Fitch Removes Flagstone Re from Rating Watch; Affirms Ratings

CHICAGO--(Business Wire)--
Fitch Ratings has affirmed its ratings on Flagstone Reinsurance Holdings, Ltd.
(NYSE:FSR) and subsidiaries (collectively Flagstone) and removed the ratings
from Rating Watch Negative. The Rating Outlook is Stable. (A full list of
ratings is included at the end of this release.)

Fitch's rating actions reflects its view that Flagstone is no longer actively
pursuing the acquisition offer it made to IPC Holdings, Ltd. (IPC) on July 1.
Today, IPC announced that its board of directors had approved a definitive
amalgamation agreement with Validus Holdings, Ltd.

Fitch placed the ratings on Rating Watch Negative on July 6 due to concerns
about how a combination of Flagstone and IPC's insured portfolios would affect
the combined entities' risk-adjusted capitalization. At that time Fitch noted
that IPC had received competing bids from other entities and that if IPC were to
reject Flagstone's offer, Fitch would remove the ratings from Rating Watch.

Flagstone's current ratings reflect the company's strong underwriting
capabilities, high-quality and liquid investment portfolio, and benefits derived
from the company's diverse operating platform. Partially offsetting these
positives are the effects on Flagstone's competitive position of the company's
comparatively small capital base and short operating history. Additionally,
Fitch believes that Flagstone is at a much earlier stage in its development than
many of its peers, and that as a result, "key man risk" associated with the
company's senior management team is comparatively high.

Fitch has removed the following ratings from Rating Watch Negative and affirmed
the ratings with a Stable Rating Outlook:

Flagstone Reassurance Suisse SA:

--Insurer Financial Strength (IFS) at 'A-'.

Flagstone Reinsurance Holdings Limited

--Long-term Issuer Default Rating (IDR) at 'BBB+';

--$120 million of floating-rate subordinated debentures due Sept. 15, 2036 at
'BBB-';

--Euro13 million of floating-rate subordinated debentures due Sept. 15, 2036 at
'BBB-';

--$25 million of floating-rate subordinated debentures due Sept. 15, 2037 at
'BBB-'.

Flagstone Finance S.A.

--Long-term IDR at 'BBB+';

--$100 million of floating-rate subordinated debentures due July 30, 2037 at
'BBB-'.

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
Mark Rouck, +1-312-368-2085 (Chicago)
Greg Dickerson, +1-212-908-0220 (New York)
David Stephenson, +44 0207 682 7471 (London)
Media Relations:
Brian Bertsch, +1-212-908-0549 (New York)
brian.bertsch@fitchratings.com

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