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Trenwick Group Ltd. (TWK) Message Board

  • cigarbat cigarbat Jan 10, 2003 1:11 PM Flag

    My Two Cents;

    Heres my analysis:

    The dividend,
    >>Any chance (reinstating) later in the year?��..ans I'd be surprised if it did.

    I think they are going to keep the dividend suspended to put the dollars to work rebuilding the balance sheet. ( This is the responsible thing to do, and great for the shareholders)

    The Actuarial Audit:
    we will most likely publish the results and most likely before 4Q release. I think this is huge, we should have advanced warning on the 4Q numbers by the release of this issue, Obviously I couldn�t type every Iota of conversations, but I kept pressing him on the release of this as soon as possible. This will position us for 4Q release.

    The -.28 earnings number, my gut feeling while chatting was it�s higher than that.

    I was actually shocked that he said this:
    Me: Between thte last few months and a few years ago. Marty: Well anyone who bought in this year, has a good deal.
    He is saying that anything within the past year is ultimately a good deal, Wow, what does that mean, why'd he say it? It was not a question I asked, voluntarilly offered? Hmmm, gotta think about this one. (Not in a negative way, but)

    New Release-
    9) That's why any info you could release, however small would be much appreciated by us, (Cause John Boy is demanding it). ans: You never know, dave
    I think the �seed� is definitely planted that were starving for news, I think I heard his wheels turning in is head. I felt at the time, that he was going to be more accomadating.

    All in all, I think it was good, positive. When we were discussing the Actuarial & Lloyds & Loc situation, I mentioned that it looks all segregated out from everthing else, and he commented, 'it dosen't matter what would happen else where, its going forward.

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    • Happy trading on monday


    • Lion, you have free use. It is now public domain. hehe

    • dont ya mean "My one cent"???

      TWK = walking , breathing Terdball

    • Thanks Jad. I think you info puts the nail in the coffin ofTWK buying the 3.7 million.

    • Actually, I'm not sure what I'm talking about, except for the general principles involved. But you're right, the LaSalle Re was the main issue I was thinking of, and I vaguely remember hearing about some other preferred stock in the mix somewhere. If all the other preferred issues are limited to their subs, they might not restrict distributions by the parent. If TWK has only one big preferred shareholder with applicable covenant rights, they might easily be able to get a waiver.

    • albrt:

      Ok, I see what you mean. You are talking about the LaSalle preferred which are traded, not the Class B preferreds which Euro re owns. Correct? I think I have to do a bit of studying on this question. Sorry, for the rare on these boards.. ;) jad

    • sure:

      Why do you make me work...

      European Re owns 550K Class B Cumulative Perpetual Preferred shares, known fondly here as the preferreds. TWK issued the shares to settle a dispute over a CAT equity put that would have required Euro re to buy $55 mil in preferreds in connection with claims arising out of 9/11. Ah, but this is making a short story long... the answer appears to be 555K, unless others own the same issue, which I can't tell from what materials I have on hand...

      BTW the dividend rate is LIBOR plus up to a maximum of 6% depending on S&P rating. The dividend is to be paid quarterly in arrears. Only one has been missed so far (Dec pmt)...

      Your job will now be to gather all materials together and supply answers to those who don't read all posts...:) jad

    • Jad:

      I think what we have here is a failure to communicate. I didn't mean the preferred shares were actually traded on 12/20--I meant they are widely traded, meaning they are in the hands of lots of different shareholders. A vote would be required to waive the preference covenants, and we would have heard about it.

      I think Sabazio is probably the person who brought this up before, but I still thought there might be a way to fudge it. Now I'm pretty sure its impossible for TWK to buy back stock if there are no plans to reinstate the dividend. Unlike common stock, preferred shares have covenants from the company promising not to do certain things that would endanger the chances of dividends being paid.

      Although a company usually has the right to suspend dividends to preferred, the covenants almost always require the company NOT to make any other type of distribution to shareholders without paying the preferred dividends. That's why they're called preferred--because they're first in line for distributions. A distribution includes repurchase of shares, since the company is distributing capital to the sellers.

      Sometimes the company is required to make all the back dividend payments before any other distributions (cumulative preferred) and sometimes they only require payment of the current dividend, but either way they can't buy back stock in the meantime, even if it would arguably benefit shareholders.

      Boy, I sure hope Sabazio didn't give a concise one sentence explanation while I was typing this.

    • Thanks. I believe there are 3 million preferrred shares, aren't there?

    • albrt:

      Preferred shares traded? You don't mean the perpetual converts, do you? Where did you see that? jad

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