The following ratings' changes were generated on October 1.

Fairfax Financial Holdings ( FFH) has been upgraded from hold to buy. Fairfax Financial Holdings Limited, through its subsidiaries, engages in property and casualty insurance and reinsurance, investment management, and insurance claims management businesses. The company also provides claims adjusting, appraisal, and loss management services. FFH registered strong financial performance and had a strong liquidity position at the end of fiscal year 2007. In addition, FFH offers superior returns to its shareholders.

For the full year 2007, FFH's total revenue increased 10.0% to $7.48 billion due to higher gains on investments, higher interest and dividends as well as increased claim fees. Portfolio investments increased 12.6% to $19.09 billion at the end of fiscal year 2007 vs. fiscal year 2006. The combined ratio improved from 95.5% to 94.0% in fiscal year 2007, mainly due to lower claims and losses. As a result, the company's underwriting profit increased 32.3% to $281.30 million. In total, the company registered a net profit of $1.09 million vs. an income of $227.50 million in a year-ago period.

The company continued to reduce its debt through open market purchases. In October 2007, the company completed an offering of $330.00 million of 7-3/4% Senior Notes due May 1, 2017 (2017 Notes) to purchase its costlier 10-3/8% Senior Notes due 2013 (2013 Notes); for a total consideration of approximately $325.70 million. Adding to this, the company had an impressive cash and equivalent balance of $4.18 billion as of second quarter fiscal year 2007 end. The current liquidity position allows FFH to cover unforeseen negativity and freedom from the reliance on external funds.

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