Berkley to Offer $150 Million in Senior Notes; S&P Rates Issue ‘BBB’

August 20, 2004

W. R. Berkley Corp. announced that it intends to issue $150 million of senior notes due 2019. Standard & Poor’s Ratings Services has assigned the issue its ‘BBB+’ debt rating.

Berkley’s announcement said the “net proceeds of the offering will be used to provide additional capital for its insurance subsidiaries and for general corporate purposes, including the repayment of indebtedness.”

It also noted that a shelf registration statement relating to the securities has been filed with the Securities and Exchange Commission and has become effective.

S&P said its rating reflects Berkley’s “strong business position, including a well-diversified revenue profile, a conservative investment portfolio that supports strong liquidity, and strong financial flexibility.”It added that Berkley’s most distinctive characteristic is earnings, and said the “company has proven in 2002 and 2003 that it could take advantage of the hard market in property/casualty and dramatically improve earnings across all segments of its business profile.”

The rating agency also cited the Berkley’s “relatively low consolidated risk-based capital position” and adequate reserves as additional factors. It noted, however, that “some capital strain in the organization exists as a result of high premium growth, especially with the addition of renewal rights premiums from Gulf Insurance Co.”

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