Swiss Re Insurance-Linked Fund Management

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Blue Capital proposes pricing for ILS funds second share placing


Blue Capital Management, the third-party capital and reinsurance-linked asset management arm of Bermudian reinsurer Montpelier Re and the manager of the Blue Capital Global Reinsurance Fund Limited, has proposed a price for the second placing of the funds shares.

Blue Capital recently proposed a new placing of shares in its flagship listed reinsurance-linked investment fund, the Blue Capital Global Reinsurance Fund Limited. The second placing of shares from its current placing programme, Blue Capital said towards the end of September that it would target raising up to $100m of new capital through a second placement of shares in the fund.

Now, Blue Capital has disclosed its proposed pricing for the share offering. The proposed Placing Price for Ordinary Shares to be issued as part of this placement will be $1.09. This Placing Price represents a 3.4% premium to the Net Asset Value per Ordinary Share as at 30th September 2013.

The newly issued shares will rank equally with existing shares for future distributions, according to Blue Capital. The Directors expect this second distribution to be US$0.044 per Ordinary Share.

Net proceeds raised through this second offering of shares in the Blue Capital Global Reinsurance Fund will be invested in fully-collateralised reinsurance contracts and other investments with exposure to catastrophe risks. Blue Capital expects to deploy the majority of the newly raised capital at the upcoming January renewals.

This share placement is expected to close on the 22nd October and the results be announced on the 23rd, followed by the newly issued shares being listed on the 28th of the month. We’ll update you when the results of the placing are published.

Montpelier Re is also simultaneously in the process of an initial public offering (IPO) for a newly formed reinsurance entity, Blue Capital Global Reinsurance Holdings, a collateralized reinsurer which will have its shares listed on the New York Stock Exchange. The end result will be another source of third-party capital for underwriting of collateralised catastrophe reinsurance contracts, but using a different structural approach to the listed fund.

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