Bermuda-based PartnerRe Ltd. announced that it has priced, through its indirectly wholly-owned subsidiary PartnerRe Finance B LLC, $500 million of 10-year fixed rate 5.50 percent Senior Notes, pursuant to its currently effective shelf registration statement.
“The Senior Notes will be fully and unconditionally guaranteed by PartnerRe Ltd. and will have a maturity of June 1, 2020,” said the bulletin. PartnerRe intends to use the proceeds for general corporate purposes.
Standard & Poor’s Ratings Services assigned its ‘A’ senior unsecured debt rating on $400 million of the notes, and affirmed its ‘A’ counterparty credit rating on PartnerRe; however S&P said the “outlook on the holding company remains negative.”
S&P added that the rating affirmation on the holding company is based on the “group’s very strong competitive position, strong operating performance, excellent enterprise risk management, and consistent and cohesive management team and strategy.
“Partially offsetting these factors are possible integration risks related to the recent acquisition of PARIS RE, potential volatility because of low retrocessional use, and capital adequacy that historically has been lower than the peer group average.”
Credit analyst Laline Carvalho also noted that in addition to the debt issuance, PartnerRe “has announced that its board of directors has authorized new share repurchases of up to 8 million common shares. We believe the combination of the debt issuance and potential share repurchases likely will lead to an increase in PartnerRe’s financial leverage in 2010,” which would be slightly higher than the Company’s “modest total debt-to-total capital ratio of 13 percent at year-end 2009.”
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