Validus Holdings, Ltd., announced today that it has raised $150 million through a private sale of Junior Subordinated Deferrable Interest Debentures as part of a pooled transaction.
"The issuance of hybrid securities is a very cost-competitive source of long-term capital for Validus," Ed Noonan, chairman and chief executive of the Bermuda-based carrier, said in a statement. The carrier started business with $1 billion in capital.
Validus was one of the so-called "Class of '05" start-ups formed in the aftermath of last year's record storm losses.
In a recent report, London-based Benfield reinsurance brokers said Bermuda carriers believe rates will rise well into next year.
Benfield said the 2005 start-up reinsurers may have had a disappointing Jan. 1 renewal season, which looks to be reversed this year. "But the enforcement of reduced underwriting gearing suggests their contributions to capacity may be modest," the report said.
Some companies may have been holding back capacity in anticipation of a tight June and July renewal season. Other companies did not renew contracts deemed potentially unprofitable, despite sometimes vastly increased rate levels and more restrictive terms and conditions, the report said.
The Validus Deferrable Interest Debentures have a fixed rate of interest equal to 9.069 percent per annum through June 15, 2011, and thereafter a floating interest rate of 3-month LIBOR plus 355 basis points, reset quarterly.
The Deferrable Interest Debentures mature June 15, 2036, and may be called at par by the company at any time after June 15, 2011.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
