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HAMILTON, BERMUDA, July 29, 2008 - XL Capital Ltd (“XL” or the “Company”) (NYSE: XL) announced today that it has agreed to sell 125,000,000 ordinary shares (the “Ordinary Shares”) (plus up to an addi-tional 18,750,000 shares issuable upon exercise of the underwriters’ option to purchase additional Ordi- nary Shares) (the “Ordinary Share Offering “) pursuant to the Company’s shelf registration statement. The Ordinary Shares are being issued at a price to the public of $16.00 per Ordinary Share.In addition, the Company has agreed to sell 20,000,000 equity security units (the “Equity Security Units”) (plus up to an additional 3,000,000 Equity Security Units issuable upon exercise of the underwriters’ op-tion to purchase additional Equity Security Units), with a stated amount of $25 per unit, consisting of (i) a forward purchase contract requiring the holder to purchase, and XL to issue, a variable number of ordi- nary shares of XL and (ii) an ownership interest in a debt security of XL (the “Equity Security Unit Offer- ing” and, together with the Ordinary Share Offering, the “Offerings”) also pursuant to XL’s shelf registra-tion statement.The forward purchase contracts of the Equity Security Units require each investor to purchase on the stock purchase date of August 15, 2011, a number of the Company’s Ordinary Shares to be determined based on the average trading price of the Company’s Ordinary Shares for a period preceding that date, or, in certain situations, a fixed number of Ordinary Shares.Total annual distributions on the Equity Security Units will be at the rate of 10.75%, consisting of interest payments at the rate of 8.25% on the senior notes and contract adjustment payments at the rate of 2.50% under the forward purchase contracts. The reference price for the Equity Security Units is $16.00 per Ordinary Share, the price to public in the Ordinary Share Offering, and the threshold appreciation price is $18.88 per Ordinary Share, which represents a premium of approximately 18% over the reference price.The Company expects total gross proceeds from the Offerings to be approximately $2.5 billion.The Company intends to use the net proceeds from the Offerings to pay $1.775 billion in connection with an agreement it entered into on July 28, 2008 with Security Capital Assurance Ltd and certain of its sub-sidiaries (sometimes collectively referred to herein as “SCA”) and certain other parties thereto in connec-tion with the termination of certain reinsurance and other agreements and for general corporate purposes including capital funding of certain of the Company’s subsidiaries.The joint book-running managers for the Offerings are Goldman, Sachs & Co. and UBS Investment Bank. Full details of the Offerings, including a description of the Ordinary Shares and the Equity Security Units and certain risk factors related to the Company and these securities, will be contained in a prospectus supplement that is available through the underwriters. Any offer will be made only by means of a pro-spectus, including a prospectus supplement, forming a part of the Company’s effective shelf registration statement. A copy of the prospectus supplement meeting the requirements of Section 10 of the Securi-ties Act of 1933 may be obtained from either (i) Goldman, Sachs & Co., Attn: Prospectus Department, 85 Broad St., New York, NY 10004 or by faxing (212) 902- 9316 or by emailing or (ii) UBS Prospectus Department, UBS Investment Bank, Attn: Prospectus De-partment, 299 Park Avenue, New York, NY 10171 or by calling (888) 827-7275.This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Ordi-nary Shares, Equity Security Units or any other securities, nor will there be any sale of the Ordinary Shares, Equity Security Units or any other securities in any state or jurisdiction in which such offer, solici-tation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.# # # This press release contains forward-looking statements. Statements that are not historical facts, including statements about XL's beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates, and expectations. Actual results may differ materially from those included in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward- looking statements includes (a) the risk that the transactions described above are not completed for any reason; (b) greater risk of loss in connection with obligations guaranteed by certain of our insurance company operating affiliates due to recent deterioration in the credit markets stemming from the poor performance of sub-prime residential mortgage loans; (c) greater frequency or severity of claims and loss activity than XL’s underwriting, reserving or investment practices anticipate based on his-torical experience or industry data; (d) trends in rates for property and casualty insurance and reinsur-ance; (e) developments in the world’s financial and capital markets that adversely affect the performance of XL’s investments or access to such markets including, but not limited to, further market developments relating to sub-prime and residential mortgages; (f) changes in general economic conditions, including foreign currency exchange rates, inflation and other factors; (g) changes in the size of XL’s claims relating to natural catastrophe losses due to the preliminary nature of some reports and estimates of loss and damage to date and (h) the other factors set forth in XL’s most recent reports on Form 10-K, Form 10-Q, and other documents on file with the Securities and Exchange Commission, as well as management’s response to any of the aforementioned factors. XL undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future developments or otherwise.