A.M. Best has commented that the financial strength rating of A (Excellent) and the issuer credit rating (ICR) of "a" of Montpelier Reinsurance Ltd (Montpelier) are unchanged following the March 31, 2015 announcement that Montpelier Re Holdings Ltd. (MRH) [NYSE:MRH], the parent company of Montpelier, had entered into a definitive agreement to be acquired by Endurance Specialty Holdings Ltd. [NYSE:ENH] (Endurance). Additionally, the ICR of "bbb" and existing debt ratings of MRH remain unchanged. The $1.8 billion transaction is to be funded by a pre-closing dividend from MRH of $450 million with the remainder of the funding to be in the form of an issuance of Endurance common shares to MRH shareholders. The transaction provides benefits for MRH shareholders at a time when mono-line property catastrophe writers are under increasing market pressure and risk-adjusted returns continue to decline. However, A.M. Best notes that if the transaction is ultimately not completed, Montpelier's business profile would be negatively impacted and it would make operating in the difficult current market conditions even more challenging. In that event, the current ratings of Montpelier would be under significant pressure. The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Key insurance criteria reports utilized: • Analyzing Insurance Holding Company Liquidity • Catastrophe Analysis in A.M. Best Ratings • Equity Credit for Hybrid Securities • Insurance Holding Company and Debt Ratings • Risk Management and the Rating Process for Insurance Companies • Understanding BCAR for Property/Casualty Insurers • Understanding Universal BCAR This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best's Ratings & Criteria Center . A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.