Lloyd's To Raise Subordinated Debt
NU Online News Service, Oct. 13, 2:31 p.m. EDT?Lloyd's said today that it plans to raise some ?500 million, or about $893 million, of long-term subordinated debt from international markets to further bolster its capital structure.[@@]
This subordinated debt, expected to be issued in pounds sterling and euros to draw European investors, has been assigned a "triple-B-plus" debt rating from A.M. Best Co. The Oldwick, N.J.-based A.M. Best also assigned an "A-minus" issuer credit rating to the Society of Lloyd's. The outlook for both ratings is stable, the ratings firm said.
Lloyd's Chief Executive Nick Prettejohn, commenting on the debut of debt issue, stated, "Lloyd's today is financially strong. We are now aiming to strengthen that position further by establishing a long-term, robust and flexible capital structure which is economically efficient for those firms which choose to operate at Lloyd's."
Mr. Prettejohn also noted that Lloyd's has been working for more than a year on "an innovative strategy" to finance the Society of Lloyd's central assets, using a mix of traditional direct contributions by members, a new syndicate loan arrangement for 2005 announced last month, and this new prospective issue of subordinated debt.
Lloyd's also announced it will soon embark on "an investor road show" to sterling and euro investors, after which the specific size and terms of the new debt issuance will be finalized.
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