Recently, AmTrust Financial Services, Inc. (AFSI) announced the pricing of its public offer of Series A preference shares. The shares have a face value of $25 per share, with aggregate liquidity preference of $115 million.
These shares of AmTrust carry a fixed dividend of 6.75% per annum of the liquidity preference. The dividend is non-cumulative and will be paid quarterly on Mar 15, Jun 15, Sep 15 and Dec 15 of each year.
However, the payment of the dividend is subject to the approval of AmTrust’s board of directors. The first quarterly dividend is payable on Sep 15, 2013.
The public offer for the 4.6 million preference shares of AmTrust has been underwritten. The offer is expected to close on Jun 10, 2013, subject to customary closing conditions.
AmTrust can redeem these preference shares fully or in parts after Jun 10, 2018. The shares will be redeemed at $25 per share. Additionally, the company will also pay any declared and unpaid dividend for prior dividend periods and any accrued and unpaid dividend for the dividend period in which the redemption takes place.
AmTrust intends to use the proceeds from the issue for its general corporate needs. The company plans to get the preference shares listed on the New York Stock Exchange.
AmTrust carries a Zacks Rank #3 (Hold). Other property and casualty insurers worth considering are Alleghany Corporation (Y), American Safety Insurance Holdings Ltd. (ASI) and Catlin Group Ltd. (CLNGF). All these companies carry a Zacks Rank #1 (Strong Buy).
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