PartnerRe raises $550 million; predicts Wilma losses

PartnerRe Ltd. (NYSE: PRE) has raised $550 million in additional capital, saying in a statement that it “intends to use the proceeds for general corporate purposes, including the pursuit of growth opportunities in the global reinsurance marketplace.”The Company secured $400 million by entering into a three-and-a-half loan agreement with Citibank, N.A. Also, it has agreed to sell $150 million of its common shares to Citigroup Global Markets Inc. in a block trade.PartnerRe has entered into a three-and-a-half-year term loan agreement with Citibank, N.A. The Company will receive net proceeds of $400 million from this loan. The loan agreement contains covenants similar to those existing in PartnerRe’s current $700 million five-year syndicated credit facility. The loan will bear interest at a margin over three-month LIBOR.Separately, the Company has entered into a three-year equity forward sale agreement with an affiliate of Citigroup Global Markets Inc., which would allow PartnerRe to deliver 6.7 million common shares to the affiliate at any time during the term of the agreement. The future sale price of PartnerRe common shares under this equity forward sale agreement will be no less than 97% and no more than 130% of the per share net proceeds, the company announced.Meanwhile, PartnerRe announced it expected claims arising from Hurricane Wilma of approximately 3% of the estimated $2-$2.5 billion total insured industry loss in Mexico, and approximately 1% of the total insured industry loss in Florida. “Due to the recent occurrence of this event, the Company does not currently have an estimate for the total industry loss from Wilma in Florida,” the reinsurer announced.