The Nasdaq has issued a statement to Maiden Holdings, Ltd. informing the reinsurer that the bid price of its common stock had closed below the required minimum $1 per share for 30 consecutive days, notifying the firm that is has 180 calendar days to regain compliance with the rule.
Specifically, on April 16th, 2019 the listing qualifications department staff of the Nasdaq issued Maiden Holdings with a Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
As a result of the minimum closing bid price falling below the requirement for 30 consecutive days, Maiden has until October 14th, 2019 to ensure the closing bid price of its common stock is at least $1 per share for a minimum of 10 consecutive business days, during the compliance period. However, should the firm fail to regain compliance with the rule, the Nasdaq could delist the company’s common stock, which Maiden has the right to appeal.
In March 2018, global financial services ratings agency, A.M. Best, announced that it had downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) of Maiden Holdings to reflect deteriorating reinsurance results. Then, in November of the same year, A.M. Best downgraded the financial strength rating of Maiden Reinsurance, Ltd. and Maiden Reinsurance North America, Inc., as well as further downgrading the Long-Term ICR of Maiden Holdings.
Maiden’s risk-adjusted capital levels fell significantly in 2018 after their levels at the end of 2017. The firm’s balance sheet declined, and loss reserve development in 2016 was adverse for the company, driven by losses in its diversified reinsurance segment, mostly in the commercial auto line.
Historically, the firm’s AmTrust reinsurance business performed at a favourable combined ratio, but the impact of adverse development of prior years’ loss reserves during 2017 hit the company.
Earlier this year, Maiden agreed to a partial termination amendment to its quota share agreement with AmTrust Financial Services, enabling it to exit specific lines of business in the agreement, including Small Commercial Business and U.S Extended Warranty and Specialty Risk, as December 31st, 2018.
Clearly, the company’s share price has struggled in recent times as a result of deteriorating reinsurance results and adverse reserve development, underpinned by downgrades by A.M. Best and warnings from analysts about the reinsurer’s performance.
