Platinum Begins Trading On NYSE

In early trading the shares were selling at $24.26.

Based in Hamilton, with offices in New York and London, the full corporate title for the new venture is Platinum Underwriters Holdings Ltd., trading under the symbol PTP.

The creation of Platinum was akin to a spinoff of St. Paul Re, while technically not taking that format, according to Pat Hirigoyen a representative for the Minnesota-based St. Paul Companies.

St. Paul Companies is a 15 percent shareholder, with Renaissance Re holding a 9.9 percent interest. While providing the data for Platinum Re to assume much of the St. Paul Re book of business, St. Paul Companies will retain the reinsurers' liabilities prior to January 2002 as well as some European flood losses that occurred this August. "We wanted to give [Platinum] a clean slate," Mr. Hirigoyen explained.He said that moving St. Paul out of reinsurance was part of a corporate strategy to reduce the volatility of overall earnings, which included exiting the medical malpractice line and closing some underperforming international operations.

Mr. Hirigoyen said the personnel of St Paul Re, which has offices in New York, were reduced through downsizing and layoffs. Some remaining claim staff and others will manage runoff business, while some will go to Platinum, he explained.

With the offering of common shares, it was announced that Platinum is offering 5 million equity security units at a price of $25 per unit. Each unit consists of a contract to purchase Platinum common shares in 2005, and an ownership interest in a senior note, due 2007, of Platinum Underwriters Finance Inc., an indirect wholly-owned subsidiary of Platinum.

Describing the arrangement, Platinum said it will make quarterly contract adjustment payments under the purchase contracts of 1.75 percent per year of the stated amount of $25 per unit.

In addition, Platinum Underwriters Finance will make quarterly interest payments on the senior notes at an annual rate of 5.25 percent.

The senior notes are guaranteed by Platinum on a senior, unsecured basis, and will be pledged as collateral to secure the holders' obligations to acquire Platinum common shares in 2005.

The units will also begin trading today on the New York Stock Exchange under the symbol "PTP Pr M." Both the common share and equity security unit offerings are expected to close on Nov. 1.

The company said that Platinum and Platinum Underwriters Finance will receive total net proceeds of $966 million, including $639 million from the sale of common shares, $120 million from the sale of equity security units, and a total of $207 million from private placements of common shares to The St. Paul and renaissance Holdings Ltd.

Running the offerings are Goldman, Sachs & Company, Merrill Lynch & Company, and Salomon Smith Barney. The offerings are co-managed by Banc of America Securities LLC, Credit Suisse First Boston, and JPMorgan.

The underwriters have the option to buy up to an additional 4.506 million common shares and 750,000 equity security units.