Rebuilding capital after the storms

ACE Limited 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.

Max Re Capital Ltd. (Nasdaq: MXRE) also entered the capital markets intending to raise money after the losses caused by Hurricanes Katrina and Rita.

Max Re announced its plans to sell 11 million of its common shares in an underwritten public offering at a price to the public of $23.50 per share. In addition, Max has granted the underwriters of the offering an option to purchase up to 1.6 million additional common shares.

If Max’s shares are traded at the anticipated $24, net proceeds are expected to be approximately $246 million. If the underwriters initiate their right to purchase shares, the aggregate amount will reach $258.5 million.

As for PartnerRe Ltd. (NYSE: PRE), it 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.

Meanwhile, PartnerRe announced it expected claims arising from Hurricane Wilma of approximately 3% of the estimated $2 billion to $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.