Alterra enters $1.1 billion loan, extends credit agreement with Bank of Nova Scotia to 2012

By Jennifer Chiou

New York, Dec. 16 - Alterra Capital Holdings Ltd. and wholly owned subsidiary Alterra Bermuda Ltd. entered into a $1.1 billion four-year secured facility for letters of credit while the subsidiary also entered into amendments to its credit facility with the Bank of Nova Scotia, extending the loan to Jan. 31, 2012 initially and subsequently to Dec. 14, 2012, according to an 8-K filing with the Securities and Exchange Commission.

The changes also allow Alterra Bermuda to request the issuance of Canadian-dollar letters of credit.

The LoC facility lists Bank of America, NA as the administrative agent.

Loans under the senior credit facility are subject to a sublimit of $250 million, and Alterra Bermuda is permitted to request that LoCs be issued for subsidiaries of Alterra Capital in currencies other than dollars, subject to a sublimit of $50 million.

The secured facility may be increased to a total of $1.6 billion.

There are limitations on incurrence of debt, liens on assets, transactions with affiliates, mergers, consolidations, dissolutions, sales of assets as well as requirements to comply with a debt to capitalization ratio and maintain a financial strength rating, the filing noted.

On Dec. 12, Alterra Bermuda also entered into a revised summary of terms for the letter-of-credit facility between Harbor Point Re Ltd. as predecessor to Alterra Bermuda and Citi Europe plc.

The insurance products provider is based in Hamilton, Bermuda.

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