Citing exposure to subprime mortgages, Fitch Ratings has placed the long-term issuer rating of Security Capital Assurance Ltd. and the insurer financial strength ratings of XL Capital Assurance Inc. and SCA's other financial guaranty insurance subsidiaries on Rating Watch Negative.Fitch said the actions were based on an updated assessment of SCA's exposure to structured finance collateralized debt obligations backed by subprime mortgage collateral. The review indicated that SCA's capital adequacy under Fitch's model falls below the guidelines for a triple-A IFS rating, the rating agency said. As a result of the action regarding XL Capital Assurance, Fitch said it has placed 3,375 municipal bond issues insured by the company on Rating Watch Negative because of its exposure to structured finance CDOs backed by subprime mortgage collateral. Fitch can be found online at http://www.fitchratings.com.

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