Aspen Ratings ‘Unaffected’ by Share Sale Plan Says S&P

April 2, 2009

Standard & Poor’s Ratings Services announced that its ratings on U.K.-based Aspen Insurance U.K. Ltd. (A/Stable/–), Bermuda-based Aspen Insurance Ltd. (A/Stable/–), and Aspen Insurance Holdings Ltd. (Aspen; BBB+/Stable/–) are unaffected by today’s announcement that Aspen intends to sell about 1.22 million of its ordinary shares in an underwritten public offering.

S&P noted that the “proceeds of the share offering, which are based on today’s opening share price, are equivalent to approximately $27 million before transaction expenses. Aspen will use them primarily to finance part of the repurchase up to 2.7 million (or about $66.8 million at par) of its 7.401 percent perpetual non-cumulative preference shares.”

In addition S&P said that “Aspen has extremely strong capital adequacy and held cash and cash equivalents of $809.1 million at year-end 2008 in addition to $365 million of available liquidity under its credit facilities, so it could easily finance the part repurchase of this $200 million hybrid, which is currently trading at 50 percent of its par value.

“However, under the terms of the replacement capital covenant within the shares’ prospectus and until and including Nov. 15, 2046, Aspen is required to issue new ordinary shares equivalent to 75 percent of the redeemed or repurchased amount of the shares.

“Following the completion of the repurchase and the new share issue, we expect a slight improvement in Aspen’s strong financial leverage and coverage ratios, no change in Aspen’s excellent risk-adjusted capital adequacy, and continued strong liquidity.”

Source: Standard & Poor’s –

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