Although all three rating agencies have expressed confidence in the ability of the insurance and reinsurance industries to withstand the World Trade Center tragedy, the potential for credit downgrades, especially in the reinsurance arena, could impact the structured finance world.

If a reinsurer were to have its financial strength rating nicked, deals that it provides credit enhancement on would also suffer. Beyond insurance, reinsurers often participate in deals as liquidity providers or liquidity back-stops.

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