Converium Completes $420M Offering
NU Online News Service, Sept. 3, 12:00 p.m. EST?Swiss reinsurer Converium Holdings AG announced today that its proposed capital increase has been underwritten by a syndicate of banks for an amount of $420 million.[@@]
On Tuesday the company said it would be forced to set aside up to an additional $100 million of reserves after a report from Tillinghast pinpointed a shortfall.
In July the company announced a reserve shortfall of $385 million, along with a six-month net loss of $594.3 million. The reserve action was described as one to address pre-IPO legacy business of the company.
Earlier this week both Moody's and Standard & Poor's downgraded various Converium entities as a result of the new reserving action and the decision to put the North American operation into runoff. It plans on setting up a new scaled-down North American operation with direct ties to the parent.
According to Converium, shareholders will be asked to approve the proposed capital increase at a meeting on Sept. 28.
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