WR Berkley Corporation (WRB) sold $300 million of senior notes on Wednesday. This was an increase from the $250 million planned originally.

Interest will be payable on the notes on Mar 15 and Sep 15 every year. The first interest payment will be made on Mar 15, 2010. The notes will mature on Sep 15, 2019; would be denominated as senior unsecured debt obligations of WR Berkley.

The company intends to use the net proceeds for general corporate purposes Incorporatedluding the potential repurchase of its common stock and the repayment of debt. Such debt may include its $150 million of 5.125% senior notes, which will mature on Sep 30, 2010. Until the net proceeds of this offering are used, they will primarily be invested in the U.S. Treasury and Government agency obligations, money market funds, municipal bonds and high grade corporate debt securities and commercial paper.

WR Berkley has and will continue to have a significant amount of debt after the offering. On Jun 30, 2009, before giving effect to this offering, the company had a total debt of $1,272 million.

At present, Berkley’s debt to capitalization ratio stands at 27.9%. It will increase to 34.4% post this issue. It is to be noted that the company’s ability to pay fixed charges has diminished witnessed by a decline in the ratio of earnings to fixed charges which shrank to 4.5:1.0 in 2008 from 12.0:1.0 in 2007.

During July, Berkley reported operating earnings of 60 cents per share, lower by 20 cents per share from the prior year. The company’s premium written remains under pressure. Also, realized losses from investments have enhanced during the quarter.

We recommend a Neutral rating on the shares of the company.

Zacks Investment Research
View original at: Zacks.com News Feed

1. (AVB) AvalonBay Communities Offers Mid-Term NotesAvalonBay Communities, Inc. (AVB), a leading real estate investment trust (REIT), has recently offered $500...
2. (AMMD) American Medical Systems Holdings Amends Notes ExchangeAmerican Medical Systems Holdings, Inc. (AMMD) amended its offer to exchange up to $250 million...
3. (USB) US Bancorp Issues Senior NotesOn Sept. 2, 2009, US Bancorp (USB) announced the sale of 3.5 year senior notes...
4. (DB) Deutsche Bank to Redeem Oil Exchange-Traded NotesDeutsche Bank AG (DB) yesterday announced that it will redeem all of its most bullish...
5. (WRB) W.R. Berkley Expands in NorthwestW.R. Berkley Corporation (WRB) recently announced the formation of a new operating unit, Berkley North...
6. (C) Citigroup Sells Bonds in AustraliaThe Australian arm of Citigroup (C) recently priced a new 3-year bond issue at AUD...

Search Posts by Tag: WR Berkley Corp. | WRB | Financial | Property & Casualty Insurance

RSS Feeds by Tag: WR Berkley Corp. | WRB | Financial | Property & Casualty Insurance |

Other Posts by: vitalstocks | RSS Feed for this author