Fitch Changes Rating Outlook On Arrow Re To Negative

Business Wire, July 2, 2002

Business Editors

Fitch Ratings has changed its Rating Outlook on Arrow Reinsurance Company Limited (Arrow Re) to Negative from Stable. Fitch continues to rate Arrow Re's insurer financial strength 'A '.

Fitch's rating action on Arrow Re is tied to its May 17, 2002, change in Rating Outlook on Goldman Sachs Group, Inc. (Goldman Sachs) to Negative from Stable.

Arrow Re, is a wholly owned subsidiary of Goldman Sachs. A capital support agreement exists between Arrow Re and Goldman Sachs requiring Goldman Sachs to maintain Arrow Re's net worth at $1 million, subject to a $1 billion cap. Thus, Fitch's rating on Arrow Re is directly linked to its 'AA-' long-term rating on Goldman Sachs.

Fitch's rating on Arrow Re continues to reflect Goldman Sachs financial strength and explicit support coupled with Arrow Re's sound underwriting policies and controls. Fitch's rating also reflects its belief that Arrow Re is closely linked to Goldman Sachs from both a risk-management and a marketing perspective.

Entity/Type
Arrow Reinsurance Company Ltd.

Action                           Rating
--Insurer financial strength     Outlook changed to Negative 'A '.