Tuesday, reinsurance business solutions provider, Maiden Holdings, Ltd. (MHLD), said its wholly owned subsidiary Maiden Holdings North America, Ltd has issued subordinated debentures in the principal amount of $260 million pursuant to an Indenture with Wilmington Trust Company as trustee. In connection with the transaction, the company has issued approximately 11,700,000 shares of common stock to the purchasers of the debentures.
The debentures have a maturity period of January 2039 and will bear interest at 14% per annum. The debentures are redeemable at par plus one year's interest at the company's election until January 2014, and thereafter at par.
The company noted that it would use the money raised from the issue of debentures for working capital purposes and also to support the recently acquired GMAC Re business.
Art Raschbaum, Chief Executive Officer, Maiden stated, "The successful completion of the trust preferred financing positions the expanded Maiden Holdings platform to continue to service its existing business and for growth. We believe that this solution is superior to a rights offering in the current environment and is in the best interest of our shareholders."
The securities were placed privately with founding shareholders and several institutional investors.
MHLD ended Tuesday's regular trading at $3.85, down 7.67% or $0.32, on an average volume of 409,340 shares on the Nasdaq. In after-hours session, the stock gained 2.81% or $0.1081, and is trading at $3.9581.
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