Bermuda-based Trenwick Group Ltd. announced today that it has reached an agreement in principle with its Lloyd’s letter of credit providers which will allow it to continue underwriting at Lloyd’s in 2003.
The company also said it will cease underwriting activities at Trenwick International Limited, and has hired Greenhill & Co., a specialist in helping troubled companies, as its financial advisor.
The providers have agreed in principle to renew a total of $182 million in letters of credit to support Trenwick’s Lloyd’s underwriting operations. The agreement is still subject to the completion of final documentation. The credit renewals along with additional capital provided by Trenwick and by Berkshire Hathaway’s National Indemnity Co. bring Trenwick’s anticipated Lloyd’s underwriting capacity for 2003 is up to $500 million.
Michael Watson, Chairman and CEO of Trenwick Managing Agents Limited, stated that he was “delighted that we are able to confirm our plans for 2003. Trenwick’s Lloyd’s capacity in 2003 will allow it the flexibility to develop its business next year and participate further in market conditions which we believe will continue to be very favorable.”
The company also announced that it has hired Greenhill & Co, LLC as its financial advisor. The group is “a recognized leader in providing advisory services in financial restructuring transactions,” said the bulletin. It has been hired by Trenwick “to assist it in evaluating and implementing a restructuring of its outstanding indebtedness and preferred equity.”
The decision to close Trenwick International, its specialty London market insurance company, to new business will result in a fourth quarter of 2002 charge for the expenses it expects to incur in connection with the termination, said the company. It will continue to administer and pay claims in connection with the insurance policies previously underwritten by Trenwick International Limited.
W. Marston Becker, Trenwick’s Acting Chairman and Acting CEO, stated, “These actions represent significant steps in the right direction for Trenwick. The $182 million of letter of credit and continued support from National Indemnity Company, Berkshire Hathaway’s affiliate, for Trenwick’s Lloyd’s underwriting operation allows us to continue to support those portions of our business which we believe will produce the best results for our policyholders, creditors and shareholders.”
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