Bermuda-based Flagstone Reinsurance Holdings Limited launched its initial public offering on the New York Stock Exchange (symbol FSR) on Friday, March 30, putting up 13,000,000 common shares, at a price of $13.50 per share.
The shares traded in a narrow range, closing at $13.53, but dropping to $13.48 in after hours trading. The IPO raised around $175 million. In addition the underwriters have the option to purchase up to an additional 1,950,000 shares at the initial public offering price less the underwriting discount.
Flagstone plans to use the proceeds to increase the underwriting capacity of its reinsurance operations.
Flagstone Re was established shortly after the disastrous 2005 hurricane season. It is a Class 4 [the most broadly authorized] Bermuda licensed reinsurer with an initial capitalization of $715 million and an “A-” financial strength rating from A.M. Best. The principles who led the formation included the Company’s management team, Lehman Brothers Merchant Banking and Lightyear Capital (See IJ web site Feb. 28, 2006).
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