<PAGE>
                                                                   Exhibit 4.2.5


                    FOURTH AMENDMENT TO THE CREDIT AGREEMENT


         This Fourth Amendment ("Fourth Amendment"), dated as of September 29,
1999, is among ENHANCE FINANCIAL SERVICES GROUP INC., a corporation duly
organized and validly existing under the laws of the State of New York (together
with its successors and assigns, the "COMPANY"); each of the lenders that is a
signatory hereto (together with its successors and assigns, individually, a
"BANK", and, collectively, the "BANKS"); and FLEET NATIONAL BANK, as Swingline
Bank (in such capacity, together with its successors and permitted assigns in
such capacity, the "SWINGLINE BANK") and as agent for the Banks (in such
capacity, together with its successors in such capacity, the "AGENT").

         The Company, the Banks, the Swingline Bank and the Agent are parties to
a Credit Agreement dated as of June 30, 1998, which Credit Agreement was amended
and restated in its entirety by the Third Amendment to the Credit Agreement
dated as of June 29, 1999 (as so amended and restated and in effect on the date
hereof, the "CREDIT AGREEMENT"). The Company has requested the Banks to increase
the commitment of each Bank to make revolving loans and to amend the covenant in
the Credit Agreement relating to the Company's incurrence or creation of
additional indebtedness. The Banks are in agreement with such request upon
certain terms and conditions. Accordingly, the parties hereto hereby agree as
follows:

         Section 1. DEFINITIONS. Except as otherwise defined in this Fourth
Amendment, terms defined in the Credit Agreement are used herein as defined
therein.

         Section 2. AMENDMENTS. Subject to the satisfaction of the conditions
precedent specified in Section 3 below, but effective as of the date hereof, the
Credit Agreement shall be amended as follows:

          (a)  Section 1.01 (CERTAIN DEFINED TERMS) is amended as follows:

               (i) by deleting the definition of "Applicable Margin" and
               substituting therefor the following:

               "APPLICABLE MARGIN" shall mean: (a) 1.50% per annum with respect
               to Revolving Credit Loans and Term Loans made, Converted or
               Continued during the Increased Rate Period that are Base Rate
               Loans, and 0% per annum for all other Revolving Credit Loans and
               Term Loans that are Base Rate Loans; and (b) with respect to (i)
               Revolving Credit Loans and Term Loans that are Eurodollar Loans
               or (ii) with respect to facility fees payable hereunder, the
               applicable percentage per annum set forth below under the caption
               "Eurodollar Spread" or "Facility Fee Rate", as the case may be,
               based upon the ratings by S&P and Moody's applicable on such date
               to the Index Debt:

<PAGE>


--------------------------------------------------------------------------------
                             Eurodollar Spread
                      --------------------------------
  Index Debt            Revolving                              Facility Fee
   Rating:            Credit Loan(1)         Term Loan              Rate
--------------------------------------------------------------------------------
   Level 1                0.210%               0.310%              0.070%
--------------------------------------------------------------------------------
   Level 2                0.250%               0.350%              0.080%
--------------------------------------------------------------------------------
   Level 3                0.290%               0.390%              0.090%
--------------------------------------------------------------------------------
   Level 4                0.325%               0.425%              0.105%
--------------------------------------------------------------------------------
   Level 5                0.355%               0.455%              0.125%
--------------------------------------------------------------------------------

(1)  During any period that the aggregate outstanding principal amount of
     Revolving Credit Loans, Competitive Loans and Swingline Loans equals or
     exceeds 33 1/3% of the aggregate Commitments of the Banks, the Eurodollar
     Spread for Revolving Credit Loans shall be increased by .100% above the
     percentages set forth in the above grid for each of the Index Debt Rating
     Levels. In addition to any increases resulting from the application of the
     provisions of the preceding sentence, the Eurodollar Spread for all
     Revolving Credit Loans made, Converted or Continued during the Increased
     Rate Period shall be increased by an additional 1.500% per annum above the
     percentages set forth in the above grid for each of the Index Debt Rating
     Levels.
--------------------------------------------------------------------------------

For purposes of determining the applicable Index Debt Rating (except for split
ratings of more than one equivalent level as provided for below): (a) Level 1
shall be deemed to be applicable if (i) no Event of Default shall have occurred
and be continuing and (ii) the Index Debt is rated AA or higher by S&P or Aa2 or
higher by Moody's; (b) Level 2 shall be deemed to be applicable if (i) no Event
of Default shall have occurred and be continuing, (ii) Level 1 is not applicable
and (iii) the Index Debt is rated A or higher by S&P OR A2 or higher by Moody's;
(c) Level 3 shall be deemed to be applicable if (i) no Event of Default shall
have occurred and be continuing, (ii) neither Level 1 nor Level 2 is applicable
and (iii) the Index Debt is rated A- or higher by S&P OR A3 or higher by
Moody's; (d) Level 4 shall be deemed to be applicable if (i) no Event of Default
shall have occurred and be continuing, (ii) neither Level 1, Level 2 nor Level 3
is applicable and (iii) the Index Debt is rated BBB+ or higher by S&P OR Baa1 or
higher by Moody's; and (e) Level 5 shall be deemed to be applicable if no other
Level is applicable. If S&P or Moody's shall not have in effect a rating for the
Index Debt (other than by reason of the circumstances referred to in the last
sentence of this definition), then S&P shall be deemed to have established a
rating in Level 5. If the rating for the Index Debt of S&P and Moody's is split
by more than one equivalent rating level, the Index Debt Rating shall be deemed
to be at that Level corresponding to the rating that is one level higher than
the lower of the two ratings. If the rating established or deemed to have been
established by S&P or Moody's for the Index Debt shall be changed (other than as
a result of a change in the rating system of S&P or Moody's), such change shall
be effective as of the


                                      -2-
<PAGE>

     date on which it is first announced by S&P or Moody's, as the case may be.
     Each change in the Applicable Margin shall apply during the period
     commencing on the effective date of such change and ending on the date
     immediately preceding the effective date of the next such change. If the
     rating system of S&P or Moody's shall change, or if S&P or Moody's shall
     cease to be in the business of rating corporate debt obligations, the
     Company and the Banks shall negotiate in good faith to amend this
     definition to reflect such changed rating system or the unavailability of
     ratings from such rating agency and, pending the effectiveness of any such
     amendment, the Applicable Margin shall be determined by reference to the
     rating most recently in effect prior to such change or cessation.

     (ii) by deleting the definition of "Commitment" and substituting therefor
     the following:

     "COMMITMENT" shall mean, as to each Bank, the obligation of such Bank to
     make Loans in an aggregate amount not exceeding the amounts and for the
     time periods set opposite such Bank's name under the caption "Commitment"
     on the signature pages of the Fourth Amendment (as the same may be reduced
     at any time or from time to time pursuant to Section 2.03 hereof).

     (iii) by adding the following new definitions:

     "FOURTH AMENDMENT" shall mean the Fourth Amendment to the Credit Agreement
     dated as of September 29, 1999 among the Company, the Banks signatory
     thereto, the Swingline Bank and the Agent.

     "INCREASED COMMITMENT PERIOD" shall mean the period from the Amendment
     Effective Date (as defined in the Fourth Amendment) to the earlier of (a)
     March 31, 2000 or (b) ten (10) days after the date the Company issues any
     shares of the capital stock of any class in the public or private market
     other than in connection with (i) the Company's employee or director
     incentive or stock option plans (including, without limitation, the
     exercise of employee or director stock options issued thereunder) or the
     Company's Director Stock Ownership Plan or (ii) any acquisition by the
     Company or any of its Subsidiaries of any business otherwise permitted by
     this Agreement, the consideration for which is, in whole or in part, shares
     of the capital stock of such class.

     "INCREASED RATE PERIOD" shall mean the period from December 15, 1999 to
     January 17, 2000.

(b) Subsection (a) of Section 3.01 (REPAYMENT OF LOANS) is deleted and replaced
with the following:

     "(a) The Company hereby promises to pay the Administrative Agent for
     account of each Bank (i) the outstanding principal amount of each of such
     Bank's Revolving Credit Loans, and each Revolving Credit Loan shall mature,
     on the Commitment Termination Date; (ii) the outstanding principal amount
     of each


                                      -3-
<PAGE>

     Competitive Loan, and each Competitive Loan shall mature, on the last day
     of the Interest Period applicable to such Loan; and (iii) on the first
     Business Day after the Increased Commitment Period, such principal amount
     of each Bank's Revolving Loans as may be necessary so that after such
     repayment, the aggregate unpaid principal amount of all Loans does not
     exceed the Commitment as automatically reduced upon the expiration of the
     Increased Commitment Period.

(c) Subsection (d) of Section 8.07 (INDEBTEDNESS) is deleted and replaced with
the following:

     "(d) additional Indebtedness of the Company and its Material Subsidiaries
     provided that on the date such Indebtedness is incurred and after giving
     effect thereto and to the concurrent retirement of any other Indebtedness
     of the Company and its Material Subsidiaries, total consolidated
     Indebtedness of the Company and its Subsidiaries (including Indebtedness
     created or incurred under any other subsection of this Section 8.07) does
     not exceed 25% of Total Capitalization or 50% of the sum of (i) Combined
     Statutory Surplus and (ii) the contingency reserves reported by each
     Insurance Subsidiary of Enhance Investment in its most recent Statutory
     Statement.

         Section 3. CONDITIONS PRECEDENT. This Fourth Amendment shall take
effect from the first day (the "Amendment Effective Date") that the Agent shall
have received counterparts hereof signed by the Company, each of the Banks
identified on the signature pages of this Fourth Amendment, the Swingline Bank
and the Agent, and each of the conditions set forth in this Section 3 has been
waived by each Bank and the Agent or met:

         (a) The Agent shall have received from the Company a certificate of a
senior officer to the Company, dated the Amendment Effective Date, stating that:

               (i) the representations and warranties contained in Section 7 of
               the Credit Agreement are correct on and as of the date of such
               certificate as though made on and as of such date (or, if such
               representation or warranty is expressly stated to have been made
               as of a specific date, as of such specific date); and

               (ii) no Event of Default or Default has occurred and is
               continuing or would result from the signing of the Fourth
               Amendment or the transactions contemplated thereby, in each case
               taking into account the effect of the amendment to Section
               8.07(d) being made by this Fourth Amendment.

         (b) The Agent shall have received a certificate of the Secretary or an
Assistant Secretary of the Company, dated the Amendment Effective Date and
certifying that, except for amendments, copies of which are attached to such
Certificate, the charters or similar organizational documents of the Company and
the Material Subsidiaries have not been amended since June 29, 1999.


                                      -4-
<PAGE>

         (c) The Agent shall have received for the account of each Bank a duly
completed Revolving Credit Note and a Competitive Note, each duly executed and
delivered by the Company and made payable to each Bank in the amount of its
increased Commitment.

         (d) The Agent shall have received an opinion, dated the Amendment
Effective Date, of Samuel Bergman, Executive Vice President and General Counsel
of the Company, covering such matters as the Administrative Agent or any Bank
may reasonably request (and the Company hereby instructs such counsel to deliver
such opinion to the Banks and the Agent), in which opinion such counsel may take
into account the effect of the amendment to Section 8.07(d) being made by this
Fourth Amendment.

         (e) The Agent shall have received all information, documents,
certificates and opinions of counsel relating to the Company and its
Subsidiaries, as any Bank or the Agent may reasonably request, all in form and
substance satisfactory to the Banks, the Agent and its special counsel.

         (f) The Agent shall have received payment of a fee for the ratable
benefit of the Banks equal to 18 basis points on the amount of the increase in
the Commitment and any other fees the Company shall have agreed to pay to the
Agent.

         (g) Day, Berry & Howard LLP, special counsel to the Agent, shall have
received payment of its legal fees and disbursements in connection with the
preparation, negotiation, execution and delivery of this Fourth Amendment.

         Section 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants as follows:

         (a) The execution, delivery and performance by the Company of this
Fourth Amendment have been duly authorized by all necessary corporate action and
do not and will not (i) require any consent or approval of its shareholders;
(ii) violate any provisions of its articles of incorporation or by-laws; (iii)
violate any provision of any law, rule, regulation (including without
limitation, Regulation U and X), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to and binding
upon the Company or any Subsidiary, it being understood that the Company may be
required to file a copy of this Fourth Amendment with the Securities and
Exchange Commission in connection with the Company's periodic filing
requirements; (iv) result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Company or any Subsidiary is a party
or by which it or its Properties may be bound; or (v) result in, or require, the
creation or imposition of any Lien upon or with respect to any of the Properties
now owned or hereafter acquired by the Company.

         (b) No authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency, or any
securities exchange, are necessary for the execution or delivery by the Company
of this Fourth Amendment or performance by the Company thereof or for the
legality, validity or enforceability of this Fourth Amendment.

         (c) This Fourth Amendment constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except to the extent


                                      -5-
<PAGE>

that such enforcement may be limited by applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights generally and by general
principles of equity.

         (d) The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Company or any of its
Subsidiaries to the Agent or any Bank in connection with the negotiation,
preparation or delivery of this Fourth Amendment or delivered pursuant hereto,
when taken as a whole, do not, as of the Amendment Effective Date, contain any
untrue statement of material fact or omit to state any material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, not misleading. To the Company's knowledge, there is no
fact peculiar to the Company or any of its Subsidiaries (in contrast to
information of a general economic or industry nature) that could have a Material
Adverse Effect that has not been disclosed herein or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Banks for use in connection with the transactions contemplated hereby.

         (e) Substantially all programming required to handle all material dates
and date processing, in and following the year 2000, of (i) the Company's and
each of its Material Subsidiaries' computer systems and (ii) equipment
containing embedded microchips (including systems and equipment supplied by
others or with which the Company's or such Material Subsidiaries' systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, has been substantially completed. The expected cost to the Company
and its Material Subsidiaries of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Company and its Material
Subsidiaries (including, without limitation, reprogramming errors and the
failure of others' systems or equipment within the control of the Company or its
Material Subsidiaries) is not anticipated to result in a Default or have
Material Adverse Effect.

         Section 5. EFFECT ON THE CREDIT AGREEMENT. The execution, delivery and
effectiveness of this Fourth Amendment shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any of the Banks
under the Credit Agreement, nor constitute a waiver of any provision of the
Credit Agreement. On and after the Amendment Effective Date, the rights and
obligations of the parties hereto shall be governed by the Credit Agreement, as
amended hereby.

         Section 6. COSTS, EXPENSES AND TAXES. The Company agrees to pay on
demand all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery and administration of this Fourth Amendment and
any other instruments and documents to be delivered hereunder (including,
without limitation, the reasonable fees and expenses of counsel to the Agent) in
accordance with the terms of Section 11.03 of the Credit Agreement.

         Section 7. EXECUTION IN COUNTERPARTS. This Fourth Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.

         Section 8. GOVERNING LAW. This Fourth Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.


                                      -6-
<PAGE>

         Section 9. DEFINED TERMS. Until the Amendment Effective Date,
capitalized terms used herein which are not expressly defined herein shall have
the meanings ascribed to them in the Credit Agreement.



                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK --
                             SIGNATURE PAGES FOLLOW]
























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<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed and delivered as of the day and year first above
written.


                                  ENHANCE FINANCIAL SERVICES GROUP INC.




                                  By: /s/ Jeffrey A. Figurelli
                                      -------------------------------------
                                      Title: Senior Vice President
                                              and Treasurer










                                      S-1
<PAGE>

<TABLE>
<CAPTION>
                    COMMITMENT


  During the Increased          At All Other
    Commitment Period               Times          BANKS
    -----------------               -----          -----
<S>                              <C>               <C>
                                                   FLEET NATIONAL BANK


                                                    By: /s/ E.B. Shelley
                                                        ---------------------------------------
       $37,500,000               $30,000,000            Title: Vice President



                                                    THE BANK OF NEW YORK


                                                    By: /s/ Evan Glass
                                                        ---------------------------------------
       $31,250,000               $25,000,000            Title: Assistant Vice President



                                                    BANK ONE, N.A. (MAIN OFFICE CHICAGO)
                                                    (FORMERLY KNOWN AS THE FIRST NATIONAL
                                                    BANK OF CHICAGO)


                                                    By: /s/ Timothy J. Stambaugh
                                                        ---------------------------------------
                                                        Title: Timothy J. Stambaugh
       $31,250,000               $25,000,000                   Senior Vice President



                                                    DEUTSCHE BANK AG, NEW YORK AND/OR
                                                    CAYMAN ISLAND BRANCHES


                                                    By: /s/ John S. McGill
                                                        ---------------------------------------
                                                        Title: John S. McGill
                                                                 Director

                                                    and

                                                    By: /s/ Ruth Leung
                                                        ---------------------------------------
                                                        Title: Ruth Leung
       $25,000,000               $20,000,000                     Director

</TABLE>

                                      S-2
<PAGE>


                                 SWINGLINE BANK

                                 FLEET NATIONAL BANK,
                                 as Swingline Bank


                                 By: /s/ E.B. Shelley
                                     -------------------------------------
                                     Title: Vice President


                                 AGENT

                                 FLEET NATIONAL BANK,
                                 as Agent


                                 By: /s/ E.B. Shelley
                                     -------------------------------------
                                     Title: Vice President


                                      S-3