Oxbridge Re IPO raises $26.4m for collateralized reinsurance operations

by Artemis on March 27, 2014

Cayman Islands based fully-collateralized reinsurance company Oxbridge Re has raised $26.4m from its initial public offering (IPO) of shares to help finance the next stage of growth for the reinsurer.

Oxbridge Re, which we wrote about last week when we covered the fact it was seeking a listing, sold 4,884,650 units at its IPO, each consisting of one ordinary share and one warrant to purchase one ordinary share, at a price of $6 per unit. The collateralized reinsurer raised aggregate net proceeds from its IPO of around $26.4m after the deduction of placement agent fees and estimated offering expenses.

The number of share warrants sold was above expectations as Oxbridge Re had previously said it expected to sell between 1.7m and 4.25m share warrants to investors. The price per unit was at the middle of expectations of the range of between $5 and $7, so overall the IPO has been very successful for Oxbridge Re, with the capital raised being towards the upper end of the firms expectations.

Oxbridge Re Holdings Limited said that the capital raised would be put towards its underwriting obligations as well as used for general corporate purposes. The shares will be listed on the NASDAQ Capital Market under the symbol OXBRU.

Oxbridge Re aims to maintain a lower cost-of-capital than competitors in the Gulf Coast property and casualty reinsurance market, using the fact it is fully-collateralized by third-party money to its advantage. The firm aims to underwrite medium frequency, high severity reinsurance business that delivers attractive underwriting profits relative to the risk it takes on.

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