On Feb. 12, 2003, Standard&Poor's Ratings Services lowered its counterparty credit rating on Fairfax Financial Holdings Ltd. (Fairfax) to 'BB' from 'BB+'. At the same time, Standard&Poor's lowered its counterparty credit rating on TIG Holdings Inc., which is Fairfax's subsidiary, to 'BB-' from 'BB'. The outlook on both of these companies is negative. These rating actions follow Fairfax's earnings announcement for the fourth quarter of 2002. The results for the quarter were mixed: underwriting results (excluding runoff operations) improved significantly, but there is the potential for liquidity strain in 2003. Standard&Poor's is concerned about Fairfax's ability to maintain adequate liquidity at the holding company. Historically, the counterparty credit and senior debt ratings on Fairfax
