Specialty insurer and reinsurer Lancashire Holdings Limited is planning to raise around $400 million in a new debt offering, the company has announced.
Lancashire has priced the offering of $400 million in aggregate principal amount of 5.625% fixed-rate reset junior subordinated notes due 2041.
The company expects to use the majority of the proceeds from this offering to pay off existing debt, as market conditions likely make this a cost efficient move.
However, the offering will also provide some additional capital for “corporate purposes,” Lanacashire added.
Debt markets are considered to be conducive to raising new capital right now and investors have been showing strong support for re/insurers’ issuances.
In June of 2020, Lancashire previously raised around $365 million in an equity share placing that aimed to take advantage of improved pricing trends.
For this new offering, the notes in question will receive Tier 2 Ancillary Capital treatment by the Bermuda Monetary Authority.
Lancashire explained that the notes will be sold and registered in minimum denominations of US $200,000 and integral multiples of US $1,000 in excess thereof.
Application will be made for the notes to be admitted to trading on the International Securities Market of the London Stock Exchange.
