XL Capital Ltd. announced that it plans to offer up to 7 million ordinary shares, plus additional shares if necessary to cover underwriters’ overallotment, in a move to strengthen its capital base.
XL shares have been trading in the $85-$90 range, making the offering worth over $600 million before expenses and commissions. The amount would significantly restore the $840 million net third quarter loss the company recently recorded (See IJ Website, Oct.24) most of which was due to the estimated $750 million in net claims from the WTC attacks.
The move echoes other recently announced capital raising initiatives by Bermuda’s insurers in response to the attacks and the expected increase in the global demand for insurance and premium raises. ACE plans to raise $1 billion, Arch Capital is raising $1 billion to start a new reinsurer, PartnerRe plans to raise $350 million, and RenaissanceRe is setting up Da Vinci Re with State Farm with an initial capitalization of $500 million.
Was this article valuable?
Here are more articles you may enjoy.