HCC Insurance amends $90 million standby letter-of-credit facility

By Susanna Moon

Chicago, Nov. 30 - HCC Insurance Holdings, Inc. amended its $90 million standby letter-of-credit facility on Nov. 23 with Barclays Bank plc and Royal Bank of Scotland plc as arrangers, according to an 8-K filing with the Securities and Exchange Commission.

The amended facility may only be used for the purpose of enabling funds at Lloyd's of London to be provided for HCC's 2012 and prior years of account at Lloyd's, the filing said.

The beneficiary of any letters of credit issued under the amended facility will be Lloyd's.

The final maturity date for letters of credit to be issued under the facility is Dec. 31, 2015.

A letter of credit under the facility equal to $90 million was issued to Lloyd's on Nov. 28, 2010.

The unused fee is 15 basis points. The letter of credit fee is 105 bps.

If the company's ratings are downgraded or if a default occurs, then the banks may require that each letter of credit issued under the facility be returned or that the liabilities of the banks under each letter of credit be reduced to zero, may require HCC to deposit cash collateral equal to the banks' letter of credit exposure under the facility or may declare any unused portion of the facility canceled.

Royal Bank of Scotland is the agent and trustee.

HCC is a Houston-based specialty insurance group.

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