Maiden Arm Offers Senior Notes - Analyst Blog


Maiden Holdings North America Ltd. (Maiden NA), a wholly owned subsidiary of Maiden Holdings Ltd. ( MHLD ), has priced the offering of its $152.5 million senior notes.

Rating agency A.M. Best Co. assigned "bbb-" debt rating with stable outlook to the new notes.

The company is offering the notes that carry a coupon rate of 7.75% and scheduled to mature on Dec 1, 2043. The notes are guaranteed by Maiden.

Maiden NA intends to deploy the net proceeds to repurchase its outstanding 14% coupon trust preferred securities (TRUPS) when they can be redeemed without the call premium on Jan 15, 2014.

The notes can be redeemed wholly or partly in cash from Dec 1, 2018 onwards at 100% of the principal amount.

As of Sep 30, 2013, the debt-to-capital ratio for Maiden Holdings was 0.25x, which increased 80 basis points from the 2012-end level. With the current issuance of $152.5 million notes, the same is expected to increase by 780 basis points to 0.33x.             .

The new issuance is also expected to push interest expense of the company higher that inched up slightly to $9.6 million in the third quarter of 2013.. Nonetheless, the company's solid operational performance generates enough funds to service the debt sans interruption.

Recently, XLIT Ltd., a subsidiary of XL Group plc ( XL ) has priced the offering of its $600 million senior notes.  A.M. Best Co. assigned a debt rating of "bbb" with a positive outlook,

Maiden Holdings presently carries a Zacks Rank #4 (Sell). While we choose stay cautious  on Maiden Holdings at the moment, other better-ranked property and casualty insurers like Cincinnati Financial Corp. ( CINF ) and Alleghany Corp. ( Y ), both of which carry a Zacks Rank #1 (Strong Buy), are worth considering.

CINCINNATI FINL (CINF): Free Stock Analysis Report

MAIDEN HOLDINGS (MHLD): Free Stock Analysis Report

XL GROUP PLC (XL): Free Stock Analysis Report

ALLEGHANY CORP (Y): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CINF , MHLD , XL , Y

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