ACE Ltd. to sell $1.3 billion in shares

ACE Limited (NYSE: ACE) is selling 28 million of its ordinary shares at a price of $45.58 per share in a public offering expected to raise gross proceeds of more than $1.3 billion.ACE has also granted to underwriters an option to purchase up to an additional 4 million ordinary shares at the same price. In a statement, ACE says it expects to “use the net proceeds of the offering of the ordinary shares for growth opportunities in the global insurance and reinsurance markets.”The share offering comes shortly after the Bermuda-based insurer filed documents with the U.S. Securities and Exchange Commission (SEC), saying it expected to lose between $650 and $700 million after taxes as a result of claims arising out Hurricanes Katrina and Rita.In a document filed with the SEC, ACE says “preliminary estimates indicate that total net losses related to Katrina and the New Orleans flood for the entire ACE Group of Companies will be approximately $550 million after tax.” Rita, the company added, might result in losses of between $100 and $150 million.Based on ACE’s public offering of shares, two rating services have taken ACE off of its CreditWatch with negative implications, the company noted in a statement. “On Oct. 3, 2005, Standard & Poor’s Ratings Services affirmed its ‘A+’ credit and financial strength ratings on the ACE Group of Companies and removed ACE from CreditWatch with negative implications, reversing the action S&P had taken on Sept. 9, 2005,” the company noted. “On the same day, Moody’s Investors Service announced that it has changed to stable from negative the outlook for ACE Limited’s debt ratings….”Both rating agencies cited ACE’s improved capitalization and financial flexibility given the recently announced $1.25 billion common equity offering.”