PXRE expands capacity with $83mn fund raising
PXRE’s Bermudian reinsurance arm PXRE Reinsurance Ltd will have an additional $83mn of capital to support its 2005 underwriting following the group’s successful fund raising.
PXRE announced last week that it had priced its previously announced public offering of 5,251,686 shares at $23.75, amounting to net proceeds of $83mn after costs. The company sold 3,724,803 shares and other shareholders sold 1,526,883 shares – amounting to $125mn in total, more than the $100mn announced in the reinsurer’s recent third quarter results.
Credit Suisse First Boston acted as bookrunning lead manager for the offering. Keefe, Bruyette & Woods served as joint lead manager. Dowling & Partners Securities, LLC, Fox-Pitt, Kelton and Lazard served as co-managers.
The catastrophe specialist recently revealed a third quarter net loss of $73.2mn caused by the US storms. The reinsurer’s president and chief executive Jeffrey Radke revealed that the group had recorded reserves at the “high end” of its net loss estimates of $80mn-$105mn “given the inherent uncertainties in reserving for multiple catastrophes”.
Radke also predicted rate increased of 5 percent to 10 percent over the company’s premium base.
“Specifically, by line of business, we expect rate increases of 10 percent to 15 percent in our worldwide retrocessional business, stable to single digit rate increases in our North American property catastrophe business and only moderate decreases in our International catastrophe business,” he said.
PXRE expects additional demand from catastrophe and retrocessional customers, he added.