RXi to see $25 million; Canadian Western plans C$135 million; Swiss Re boosted by Buffet

By Devika Patel

Knoxville, Tenn., Feb. 5 - RXi Pharmaceuticals Corp. negotiated a $25 million line of credit with YA Global Investments intended to help the company begin clinical trials.

Hoping to raise funds for growth opportunities, Canadian Western Bank announced plans to raise C$135 million in a placement of trust units. The deal was priced concurrently with a public offering of C$65 million in trust units.

Warren Buffet's Berkshire Hathaway Inc. will invest CHF 3 billion in Swiss Re, offsetting the company's net loss of about CHF 1 billion for 2008. The news did not, however, help company shares (Pink Sheets: SWCEY), which plunged 26.06%, or $6.72, to close at $19.07 Thursday.

RXi plans $25 million

Worcester, Mass., biopharmaceutical company RXi arranged a $25 million line of credit with YA Global Investments, a Yorkville Advisors fund. The company's shares (Nasdaq: RXII) responded well, rising 3.21%, or 19 cents, to close at $6.10 Thursday.

The company will sell shares in tranches of up to $500,000 at a price-per-share at a 5% discount on the lowest daily volume-weighted average price of RXi's stock over five consecutive trading days following the date RXi notifies YA Global that it intends to sell shares.

Proceeds will be used to begin clinical trials for the company's therapeutic products, which are based on RNA interference, or RNAi.

According to the company Web site, RXi intends to use a broad platform of RNAi‑based technologies across multiple therapeutic areas, with an initial focus on the treatment of neurological diseases, metabolic diseases and cancer.

RNAi is a mechanism for the regulation of gene expression that has the potential to be harnessed to inhibit the activity of human genes. It is believed that this inhibition may potentially treat human diseases by "turning-off" genes that lead to disease.

"This agreement is particularly well suited to provide RXi with the financial flexibility to move our product programs towards the clinic, while we continue to develop and expand our therapeutic platform," RXi president and chief executive officer Tod Woolf stated.

"While we have no immediate intention to draw on this equity facility, we are pleased to have access to potential capital that could strengthen our financial position as we continue our partnering negotiations.

"We are gratified that, despite the challenging financing climate, a well established, well capitalized fund such as Yorkville has committed to invest in RXi under favorable terms for us. We believe this a reflection of the strength of RXi's team and our RNAi therapeutics platform," he added.

Canadian Western: C$135 million

Canadian Western, an Edmonton, Alberta, bank, orchestrated a C$135 million units sale intended to raise capital for growth opportunities.

The company will sell 5.4 million units of one 7.25% series 3 preferred share and 1.7857 warrants. The warrants are each exercisable at C$14.00 for five years.

The preferreds will yield 7.25% in annual dividends until April 30, 2014. Thereafter, the dividend rate will reset every five years at a level of 500 basis points over the then five-year Government of Canada bond yield.

Holders may convert the preferreds to series 4 non-cumulative floating rate preferred shares on April 30, 2014 and on April 30 every five years thereafter.

"We are very pleased to announce this agreement, as execution will significantly augment the bank's already strong balance sheet and provides considerable flexibility to pursue accretive growth opportunities," the bank's president and chief executive, Larry Pollock, said in a press release.

"We would also like to recognize the premier institutions that participated in the private placement of this deal. We are extremely pleased they have joined our strong base of institutional investors and would like to extend our gratitude for their recognition of Canadian Western Bank's growth potential," Pollock continued.

Company shares (Toronto: CWB) dropped 1.96%, or 22 cents, to close at C$11.00 Thursday.

Swiss Re revitalized

Zurich, Switzerland's Swiss Re hopes to get a capital infusion of CHF 3 billion from Berkshire Hathaway. The company reported a disappointing loss of CHF 1 billion last year, and hopes this sale will reinforce its capital strength.

The insurance company is selling a 12% convertible perpetual capital instrument, which will be convertible after three years at CHF 25 per share.

The company also said it will consider raising another CHF 2 billion in the near future to help maintain its financial flexibility.

"We are disappointed with our overall results in 2008, but our core business ‑ property & casualty and life & health ‑ is performing well,'' Swiss Re's chief executive officer Jacques Aigrain said in a release.

"We have taken steps to protect our capital strength to ensure the continued trust of our clients, and we continue to manage our business in a disciplined, conservative manner. Warren Buffett's agreement to invest in Swiss Re is a testament to the strength of our franchise.''

Buffett echoed Aigrain's comments, saying he believes in the company's potential.

"We are delighted to have this opportunity to increase our investment in Swiss Re. I am very impressed by Jacques Aigrain and his management team," Buffet said in the release.

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