Third Point Re launches debt offering to capitalise U.S. operations

by Artemis on January 20, 2015

Hedge fund strategy reinsurance group Third Point Re has launched a debt offering the proceeds of which will be used to partially finance the capitalisation of its new U.S. subsidiary Third Point Reinsurance (USA) Ltd.

As Artemis reported this morning, the U.S. arm of Third Point Re is coming nearer to fruition, with it receiving a rating from A.M. Best which gives its business plan the seal of approval. The next step it would seem is to finance the effort and Third Point Re is electing to do this through an offering of senior notes to investors.

According to an announcement, subsidiary Third Point Re (USA) Holdings Inc. intends to pursue an offering and sale of senior notes, the net proceeds of which will be used to partially finance the capitalisation of wholly owned subsidiary, Third Point Reinsurance (USA) Ltd. The notes are expected to be fully and unconditionally guaranteed by TPRE and are expected to be registered under the Securities Act of 1933, as amended (the “Securities Act”). A prospectus has been filed with the SEC containing details of the offering of notes.

Third Point Re USA will follow a similar strategy and business plan to its Bermuda based parent, offering very similar reinsurance products but direct to U.S. market clients.

So this offering of senior debt to help capitalise TPRUSA should be attractive to investors seeking to tap the returns of the reinsurance sector. The notes will provide a different way to access some of the total-return generated by the business Third Point Re underwrites as well as its asset side performance, which is of course managed by Daniel Loeb’s Third Point LLC hedge fund.

Also read from earlier: Third Point Re’s U.S. reinsurance operations rated by A.M. Best.

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