Standard & Poor’s Ratings Services has placed its credit ratings for Fairfax Financial Holdings Ltd. on CreditWatch with negative implications on news that Fairfax’s annual report will be delayed as a subsidiary must restate its financials.

“We put these ratings on CreditWatch negative in response to the announcement by FFH that it will delay filing its 2005 annual report,” explained Standard & Poor’s credit analyst Damien Magarelli. “The delay is being caused by the announcement by its 80%-owned affiliate, Odyssey Re Holdings Corp., that it intends to file a notice with the SEC that it will delay the filing of its 2005 annual report on Form 10-K.” Odyssey Re is expected to complete its filing within the next 30 days.

Odyssey Re stated in its release that this delay is in connection with the previously announced restatement of its financial results for 2001 through 2004 and the nine months ended Sept. 30, 2005. The company maintains that it requires additional time to complete the year-end process.

“The potential impact of this delay on Odyssey’s competitive position – including reputation risk and the ability to meet filing and regulatory requirements as well as the financial impact resulting from a potential restatement – remains unclear,” S&P said. It noted that the ratings on FFH could be affected by any adverse rating action on Odyssey because of the significance of the firm to the consolidated financial condition of FFH.

Standard & Poor’s expects to resolve the CreditWatch status of the ratings following the filing of Odyssey’s 10-K.