Bermuda’s PXRE Group Ltd. announced that it has reached an agreement with Capital Z Financial Services Fund II, investment funds managed by Reservoir Capital Group, and Richard Rainwater, to invest $150 million in new equity capital in the form of convertible preferred stock.
The funds will be used to replace some of the $35 million in net losses PXRE suffered from the WTC disaster, and will give it increased underwriting capacity to enable the company to expand its operations to take advantage of the expected increase in the demand for reinsurance and rising rates.
Shortly after PXRE’s announcement, Standard & Poor’s commented that it would retain its single-‘A’ counterparty credit and financial strength rating on two principal operating units PXRE Reinsurance Co. and PXRE Reinsurance Ltd., and that they would remain on CreditWatch with negative implications.
S&P noted, however, that it “believes capital adequacy has bottomed at 132% as projected for the year-end 2001 and will be restored to very strong levels through new, privately placed capital of $150 million.” It further indicated that “PXRE has returned to its core competency, and its business operations are expected to focus on property catastrophe reinsurance over the next 2-3 years.”|”pxre, receive, $150, million, capital, infusion
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