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CHICAGO--([ BUSINESS WIRE ])--Fitch Ratings has assigned an 'A' rating to any unsecured senior debt securities proposed to be issued under HCC Insurance Holdings, Inc.'s (NYSE: HCC) recently filed registration statement. A complete list of ratings follows at the end of this release.

Under this shelf registration, HCC may issue up to $1 billion in various securities, including senior notes, subordinated debt, junior subordinated debt, trust preferred securities, preferred stock, common stock, and warrants. Fitch provides no opinion on other securities to be issued under the shelf, as ratings depend on how terms align with the agency's criteria relating to subordinated debt and hybrid securities.

On March 20, 2012, Fitch affirmed HCC's ratings with a Stable Outlook. The company's ratings reflect consistently strong financial performance, solid capitalization, and conservative investment and reserving practices. Offsetting rating factors include increased catastrophe risk since 2009, driven by growth in HCC's property treaty book, and greater reserve volatility associated with longer tail product lines.

HCC's ratings also reflect moderate financial leverage with a debt-to-capital ratio of 13.5%, excluding unrealized investment gains and losses. Continued share repurchase activity and/or modestly sized acquisitions could lead to periodic increases in financial leverage; however, Fitch expects run rate financial leverage to remain below 20%. Any new debt issuance under the shelf registration is not anticipated to increase financial leverage above this level. The company maintained solid operating earnings-based interest coverage at 16 times (x) at year-end 2011.

Fitch currently rates HCC as follows:

HCC Insurance Holdings, Inc.

--Issuer Default Rating 'A+';

--$300 million 6.3% senior notes due Nov. 15, 2019 'A'.

Houston Casualty Company

Avemco Insurance Company

HCC Life Insurance Company

HCC Specialty Insurance Company

U.S. Specialty Insurance Company

Perico Life Insurance Company

American Contractors Indemnity Company

United States Surety Company

--Insurer Financial Strength rating 'AA'.

The Rating Outlook is Stable.

Additional information is available at '[ www.fitchratings.com ]'. 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 & Related Research:

--'Fitch Affirms HCC's Ratings; Outlook Stable' (March 20, 2012);

--'Insurance Rating Methodology' (Sept. 22, 2011).

Applicable Criteria and Related Research:

Insurance Rating Methodology

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018 ]

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