Bermuda’s PartnerRe Ltd. announced that it will issue $250 million in Junior Subordinated Capital Efficient Notes, or”CENts”, pursuant to its currently effective shelf registration statement. They will be issued by PartnerRe Finance II Inc., an indirect subsidiary of PartnerRe Ltd.
In a later announcement the Company said it had priced the “offering of 6.44 percent Fixed-to-Floating Junior Subordinated Capital Efficient Notes (“CENts”). The offering is expected to close on November 7, 2006.”
PartnerRe also indicated that it “intends to use a portion of the net proceeds of the offering to redeem the $200 million, 7.90 percent PartnerRe Capital Trust I Preferred Shares. The 7.90 percent PartnerRe Capital Trust I Preferred Shares are redeemable on or after November 21, 2006 at their liquidation value of $25.00 plus accrued dividends. The Company expects to issue a formal call notice on the outstanding 7.90 percent PartnerRe Capital Trust I Preferred Shares as soon as practicable following the close of the offering.”
A.M. Best Co. assigned a debt rating of “bbb” to PartnerRe’s CENts, and indicated that the “rating outlook is stable. All other ratings of PartnerRe and its subsidiaries remain unchanged.”
Best said: “On a prospective basis, PartnerRe’s debt and preferred issues will be approximately 31 percent of total capital after the redemption of the aforementioned securities on November 21, 2006, which is at the high-end of the acceptable range for its current rating level. However, solid operating earnings reported at September 30, 2006 have bolstered PartnerRe’s capitalization. Prospectively, A.M. Best expects that PartnerRe will maintain a level of financial leverage at 35 percent or less while maintaining a fixed charge coverage in the mid- to upper-single-digit range.”
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