Australia’s QBE Insurance group has completed a 20-year convertible debt issue of U.S. $250 million, which the company said would be used to pay off some existing bank loans and to strengthen its balance sheet.
QBE, which actually writes over 80 percent of its business outside Australia and is the second largest player in the Lloyd’s market, had previously raised around U.S. $350 million in an equity issue last year, made necessary by the drain on its loss reserves resulting from the Sept. 11 attacks. QBE’s profits had been growing for 20 years until 2001, when it reported a net loss.
The company had indicated that it didn’t expect to need additional financing, but the combination of low interest rates and the growth opportunities presented by the hardening insurance market apparently led to the decision to increase its capital.
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