PartnerRe Ltd. joined its Bermuda neighbor RenaissanceRe in announcing that it “expects to record a non-operating charge of $74 million to write-down its total investment in Channel Re.”
PartnerRe has a 20 percent equity interest in Channel Re, a privately owned financial guaranty reinsurer that provides reinsurance services exclusively to MBIA. At September 30, 2007, the carrying value of the Company’s investment in Channel Re was $74 million.
PartnerRe said its discussions with Channel Re confirmed recent announcements by MBIA that it will “record a fourth quarter 2007 mark-to-market charge of $3.3 billion, including approximately $200 million in credit impairments.” The effect on Channel Re means the mark-to-market write-downs are “in excess of its GAAP shareholders’ equity.”
As a result PartnerRe said it “will write down its total investment in Channel Re. This write-down will have no impact on operating income, but will impact net income and GAAP book value. The fourth quarter 2007 impact to GAAP book value will be $1.31 per diluted share.”
The bulletin added that “notwithstanding this, PartnerRe management expects to report year-end 2007 GAAP book value of approximately $68.00 per diluted share, representing in excess of 20 percent growth year-over-year. PartnerRe’s fourth quarter and full year 2007 results are scheduled to be released after the market close on February 4, 2008.
Source: PartnerRe – www.partnerre.com
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