Blue Capital Re prices IPO at $20 per share, with market cap of $175m


Blue Capital Reinsurance Holdings, the third-party capital financed collateralized reinsurer being IPO’d as a New York Stock Exchange listed subsidiary of Bermuda-based reinsurer Montpelier Re, has announced the pricing of shares for its initial public offering.

Shares will be priced at the target price, previously announced, of $20.00 per share. The initial public offering will see 6,250,000 sold to external investors at $20 each, raising $125m in capital from third-party sources for the reinsurer. Another 937,500 shares will be available to the underwriters of the deal at the offering price, less an underwriting discount, for a 30 day period, which could raise another $1.8m or so.

Concurrently with the IPO Montpelier Reinsurance Ltd., another wholly owned subsidiary of Montpelier, will purchase 2,500,000 common shares at the offering price of $20.00 per share in a private placement, raising another $50m.

The full offering will give Blue Capital Re a market capitalization of $175m, or slightly more if the underwriters take advantage of their option to purchase shares. The capital raised will largely be deployed into fully-collateralised reinsurance contracts at the January reinsurance renewals.

The common shares of Blue Capital Reinsurance are set to start trading on the New York Stock Exchange today, 6th November 2013, under the ticker symbol “BCRH”.

Deutsche Bank Securities Inc., Barclays Capital Inc., Keefe, Bruyette & Woods, Inc., Raymond James & Associates, Inc., UBS Securities LLC and RBC Capital Markets, LLC acted as joint bookrunners and Sterne, Agee & Leach, Inc. acted as co-manager for the offering.

It will be interesting to watch how the shares trade after the IPO is completed, as the launch and listing of Blue Capital Reinsurance Holdings is a rare opportunity for investors to access the returns of collateralized catastrophe reinsurance business via a stock exchange listing.

We’ll keep you updated as the Blue Capital Reinsurance IPO progresses and the final results of the offering are announced.

Blue Capital Re establishes dividend policy, targets 8% RoE

Blue Capital Reinsurance Holdings to target $125m in IPO

More details on the forthcoming launch of Blue Capital Reinsurance Holdings can be found in this article.

Read our recent article on Blue Capital’s contribution to Montpelier Re Q3 results.

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