Rating Recap: Residential Re 2007 (USAA)

Standard & Poor’s Ratings Services has assigned senior secured debt ratings to five classes of variable rate notes issued by Residential Reinsurance 2007 Ltd. (Res Re 2007) as follows:
— $145 million Class 1 Series 2007-1 variable-rate notes due June 7, 2010, rated ‘BB’.
— $125 million Class 2 Series 2007-1 variable-rate notes due June 7, 2010, rated ‘B’.
— $75 million Class 3 Series 2007-1 variable-rate notes due June 7, 2010, rated ‘B’.
— $155 million Class 4 Series 2007-1 variable-rate notes due June 7, 2010, rated ‘BB+’.
— $100 million Class 5 Series 2007-1 variable-rate notes due June 7, 2010, rated ‘BB+’.
The notes are the initial offerings under Res Re 2007’s variable-rate note program. Res Re 2007 is a Cayman Islands exempted company licensed as a Class B insurer in the Cayman Islands. It serves as a vehicle for the United Services Automobile Assoc. (USAA; AAA/Stable/–), a reciprocal interinsurance exchange domiciled in Texas and the ceding insurer, as well as some of its affiliated companies, which have entered into five reinsurance agreements with Res Re 2007. The purpose of issuing the notes and entering into the reinsurance agreements is to provide USAA with a source of indemnified multi-year reinsurance capacity.