Peak Re issues US$250 million capital securities at 5.35%
Reinsurer says transaction will boost underwriting capacity in hardening market
29 Oct 2020 | The Asset

Hong Kong-based Peak Reinsurance Co. Ltd. (Peak Re) has issued US$250 million of perpetual subordinated guaranteed capital securities at 5.35%. The securities, issued through its wholly owned subsidiary Peak Re (BVI) Holding Limited, are rated Baa2 (hyb) by Moody’s, and guaranteed by Peak Re which is currently rated A3 (stable) by Moody’s.

The transaction garnered a final orderbook of US$1.1 billion, or an oversubscription of 4.4 times, demonstrating the strong interest that global investors have for investment-grade hybrid capital securities, and their confidence in Peak Re’s business outlook, the company says.

It also marks the first public capital instrument in perpetual hybrid format issued by a Hong Kong-based global reinsurer.

Peak Re says the proceeds will be used to strengthen its capital base and increase its underwriting capacity. Chief executive officer Franz Josef Hahn comments: "The transaction marks a significant milestone for Peak Re. The securities will enable the company to diversify its capital structure, and bring additional capacity to the reinsurance market from international investors. Our business has shown resilience to the current pandemic, and with the hardening of the reinsurance market, the new capital will enable Peak Re to capture the growth opportunity ahead.”

Citi and HSBC were the lead managers for the deal.

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