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Maiden Holdings, Ltd. Message Board

  • bottomsupinvestor bottomsupinvestor Sep 26, 2013 5:04 PM Flag

    Offering / Rating

    Is this price weakness due to the offering of the convertible shares or the negative outlook recently given to the rating by S&P??? Maybe it is all linked together. Hopefully, MHLD can continue to bring home the bacon while avoiding any major catastrophe and still support growth.

    NEW YORK (Standard & Poor's) Sept. 26, 2013--Standard & Poor's Ratings
    Services said today that it affirmed its 'BBB+' long-term financial strength
    ratings on Maiden Insurance Co. Ltd. (Bermuda) and Maiden Reinsurance Co. and
    its 'BBB-' long-term counterparty credit ratings on Maiden Holdings Ltd. (MHLD:$12.25,00$-0.15,00-1.21%) and
    Maiden Holdings North America Ltd. (US). The outlook is negative.

    Maiden is issuing $150 million of mandatorily convertible preferred shares,
    using the proceeds to fund the growth of its business. The new preferred stock
    issuance will automatically convert into common equity after three years and
    will be treated as having high equity content, allowing for full credit toward

    We expect this additional preferred stock issuance to push Maiden's financial
    leverage to our maximum tolerances of about 40%. We also expect fixed-charge
    coverage to be about 3x and leverage to drop during the next two years as
    retained earnings add to the capital base.

    "The rating affirmation is based on the company's satisfactory business risk
    and upper adequate financial risk," said Standard & Poor's credit analyst
    Jason Porter.

    The negative outlook reflects our concern that Maiden's growth could erode its
    capital adequacy. Also, the high leverage provides little capacity to absorb a
    balance-sheet shock or raise additional debt/hybrid capital.

    We could downgrade Maiden within the next 12 months if we believe the company
    is unable to maintain capital adequacy at the 'A' level according to our
    capital model. We expect Maiden's growth to consume a substantial amount of
    capital, which could cause us to lower our scores for capital adequacy, and
    consequently, capital and e

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13.45-0.35(-2.54%)Oct 27 4:00 PMEDT