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Lancashire Announces US$200 Million Credit Facility
Hamilton, Bermuda: July 31, 2007 -- Lancashire Holdings Limited today announced that it and its wholly owned subsidiary Lancashire Insurance Company Limited have entered into a $200 million secured five year letter of credit facility (the "Facility").
T he Facility will be used to support obligations of Lancashire Insurance Company Limited under reinsurance contracts. The Facility also has a $75 million sub-limit for revolving loans, which can be used for working capital and other corporate purposes. The Facility replaces the existing $350 million three year letter of credit facility.
Neil McConachie, Chief Financial Officer, commented: "With favourable conditions in the credit markets, we considered this an opportune time to refinance the Facility at very attractive terms and at a size which is appropriate for the expected letter of credit needs of our predominantly
direct portfolio over the medium term. We are very pleased to have a group of leading financial institutions continuing to show their strong support for the Lancashire group. This facility maintains the long-term financial flexibility and strength we have committed to our clients."
The Facility was arranged by Banc of America Securities LLC and HSBC Securities (USA) Inc. as Joint Lead Arrangers and Joint Book Managers. Bank of America, N.A. is Administrative Agent, Fronting Bank and L/C Administrator. HSBC Bank USA, National Association is the Syndication Agent. ING Bank N.V., London Branch, The Bank of New York, Lloyds TSB, Barclays Bank PLC and JPMorgan Chase Bank, N.A. are also lenders under the Facility.
Neil McConachie added "We believe our business plan, as a diversified direct specialty insurance writer, lends itself to strong performance through hard and soft cycles. We underwrite a diverse worldwide portfolio of short-tail property risks. Programs are mostly written on a direct basis, and the majority of the 2007 book is not expected to be significantly exposed to natural catastrophes.