Maiden Holdings, Ltd. (NASDAQ:MHLD) will offer 6.625% $110 million senior notes. These notes are scheduled to mature on Jun 14, 2046.
Notably, these notes can be redeemed for cash, in whole or in part, on or after Jun 14, 2021 at a price equal to 100% of the principal amount of the senior notes. The notes can be redeemed with the addition of accrued but unpaid interest, excluding the date of redemption.
The property and casualty (P&C) insurer plans to deploy the net proceeds from the offering to support and develop its reinsurance business and for other general corporate purposes. The company is likely to deploy the funds garnered from the pricing to repay outstanding indebtedness, which includes 8.25% $107.5 million outstanding notes of Maiden Holdings North America, Ltd. These notes are scheduled to mature in 2041.
Maiden Holdings displays its prudence by issuing senior notes amid still a low interest rate environment to procure funds. By capitalizing on the low interest rate environment, the company is consciously making efforts to reduce its interest burden, thereby facilitating margin expansion. Also, a sustained operational strength will enable the company to service debt uninterruptedly and thus, maintain its creditworthiness.
As of Mar 31, 2016, the company’s long-term debt was $350.03 million compared with $349.93 million at the end of 2015. This reflects an increase of approximately 0.03%. The debt-to-equity ratio as of Mar 31, 2016 was 23.9%, down from 25.9% at the end of 2015. However, the latest offering will increase the debt-to-equity ratio by another 760 basis points.
Zacks Rank and Stocks to Consider
Currently, Maiden Holdings carries a Zacks Rank #3 (Hold). Some better-ranked stocks are Cincinnati Financial Corp. (NASDAQ:CINF) , Markel Corp. (NYSE:MKL) and NMI Holdings, Inc. (NASDAQ:NMIH) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
CINCINNATI FINL (CINF): Free Stock Analysis Report
MARKEL CORP (MKL): Free Stock Analysis Report
MAIDEN HOLDINGS (MHLD): Free Stock Analysis Report
NMI HOLDINGS-A (NMIH): Free Stock Analysis Report
Original post
Zacks Investment Research