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ACE obtains $1 billion facility to replace $1.5 billion existing loans
By Marisa Wong
Madison, Wis., Nov. 13 - ACE Ltd. entered into a credit agreement on Nov. 6 with Wells Fargo Bank, NA as administrative agent. The agreement provides for up to $1 billion of availability, all of which may be used for letters of credit and up to $300 million of which may be used for revolving loans, according to an 8-K filed Tuesday with the Securities and Exchange Commission.
ACE Bermuda Insurance Ltd., ACE Tempest Life Reinsurance Ltd., ACE Tempest Reinsurance Ltd. and ACE INA Holdings Inc. are also borrowers under the credit agreement.
ACE may increase total availability under the credit agreement by up to $500 million.
Interest, the commitment fee and the letter-of-credit commission are based on ACE's long-term foreign issuer credit rating.
The credit agreement contains financial covenants including
• Maintaining a minimum consolidated net worth of not less than $17,486,776,000, subject to an annual reset provision, plus 25% of cumulative net income from June 30 plus 50% of the net proceeds of any issuance of equity interests after June 30; and
• Maintaining a ratio of consolidated total debt to total capitalization of not greater than 0.35 to 1.
The facility may be used for working capital and other general corporate purposes.
The facility replaces the $1 billion syndicated second amended and restated reimbursement agreement dated Nov. 8, 2007 with Wells Fargo as administrative agent and the $500 million syndicated second amended and restated credit agreement dated Nov. 8, 2007 with JPMorgan Chase Bank, NA as administrative agent. Both of those agreements were terminated upon closing of the new facility.
ACE Ltd. is the Zurich-based parent company of global insurance provider ACE Group.
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