The national scale rating on Turkey-based reinsurer Milli Reasurans T.A.S. (Milli Re) reflects the company's marginal quality of investments (from a global perspective) and concentration in the Turkish market, which exacerbates the potential impact of earthquake-exposure modeling risk. These negative factors are partially mitigated, however, by Milli Re's dominant competitive position in Turkey and adequate capitalization. Quality of investments is the main constraining factor for the rating. Milli Re invests in instruments and deposits with some of the best credit quality available in the Republic of Turkey (foreign currency BB-/Stable/B, local currency BB/Stable/B, Turkey national scale rating trAA+/--/trA-1), although this still constitutes a marginal quality of investments on a global scale. Milli Re invests predominantly in Turkish assets (85% of
