XL Capital $650 million mandatory convertibles talked at 7%-7.5% dividend, up 20%-24%

By Rebecca Melvin

Princeton, N.J., Dec. 1 - XL Capital Ltd. is expected to price $650 million of mandatory convertibles on Dec. 7, after the markets close, according to a syndicate source.

Goldman Sachs & Co. and Citigroup are joint bookrunners.

The $25 equity units were talked with a 7% to 7.50% dividend and a 20% to 24% initial conversion premium.

There is $97.5 million over-allotment option.

The mandatories will be priced concurrently with $2.15 billion in ordinary shares, but the offerings are not conditioned upon each other.

Proceeds will be used for general corporate purposes, including replenishment of subsidiary capital bases following third-quarter catastrophe losses, estimated losses relating to Hurricane Wilma and the recent adverse determination by the independent actuary in connection with XL post-closing reserve seasoning process with Winterthur Swiss Insurance Co.

XL Capital is a Bermuda-based insurance and reinsurance company.

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