Maiden Holdings Selling First US Bond, A $75 Million Issue

Maiden Holdings North America Ltd., an affiliate of Bermuda-based reinsurance company Maiden Holdings Ltd. (MHLD), came to market Thursday with its inaugural U.S. debt offering.

The $75 million issue, which is targeted at individual or "retail" investors, is guaranteed by Maiden Holdings, according to a prospectus.

Neither the issuer nor the parent company has been in the U.S. investment-grade debt markets before, according to data provider Dealogic. Maiden Holdings is unrelated to the Maiden Lane vehicles housing mortgage bonds and other risky securities created by the Federal Reserve Bank of New York.

Bank of America Merrill Lynch is sole bookrunner on the sale, which is scheduled to price late Thursday or Friday.

Proceeds from the offering will be used to buy back a batch of trust preferred securities, or TRUPs, issued by Maiden Capital Financing Trust in January 2009.

The new unsecured debt, which matures in 30 years and is expected to be rated BBB-minus by Standard & Poor's, is callable by Maiden Holdings North America after five years at par. They can also be redeemed by the issuer after "certain tax events," according to the prospectus, which include amendments to tax laws.

The notes are expected to price to yield around 8.25%, according to a person familiar with the offering.

Comparable debt includes bonds due 2040 issued by rival reinsurer Validus Group, now yielding 8.30%, the person familiar added.

Maiden Holdings, formed in 2007, provides reinsurance solutions to American and European insurers, focusing on non-catastrophe inland marine and property coverage.

The company reported global revenues of $1.2 billion in 2010 and a net income of $19.3 million in the first quarter of 2011.

-By Nicole Hong, Dow Jones Newswires; 212-416-3760; nicole.hong@dowjones.com

Maiden (NASDAQ:MHLD)
Historical Stock Chart
From May 2024 to Jun 2024