Watford enters into $100 million 364-day letter-of-credit facility

By Sarah Lizee

Olympia, Wash., Sept. 25 – Watford Holdings Ltd. entered into an unsecured 364-day letter-of-credit agreement on Sept. 20 with total commitments of $100 million, according to an 8-K filing with the Securities and Exchange Commission.

Subsidiary Watford Re Ltd. is an account party under the agreement.

Lloyds Bank Corporate Markets plc and BMO Capital Markets Corp. are joint lead arrangers and joint bookrunners, with Lloyds as administrative agent.

The proceeds may be used by Watford Re to support its insurance obligations, obligations under reinsurance agreements and retrocession agreements to which it is a party and similar risk obligations.

The commitments terminate on Sept. 19, 2020 but may be extended for an additional 364-day period.

Unless reimbursement on the date credit is extended, unreimbursed amounts under the agreement will accrue interest at a rate per annum equal to a base rate plus 200 basis points.

There is a commitment fee for each calendar quarter at a per annum rate equal to 30 bps on such lender’s ratable share of the average daily aggregate unused portion of the commitments and a letter-of-credit fee for each calendar quarter in respect of all letters of credit issued and outstanding during such quarter at a per annum rate equal to 175 bps on the lender’s ratable share of the average daily aggregate amount of those letters of credit.

Covenants include a minimum consolidated debt to tangible net worth ratio, a minimum consolidated tangible net worth requirement and a minimum asset holdings requirement.

Watford is a property and casualty insurance and reinsurance company based in Pembroke, Bermuda.

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