Trenwick Group obtains forbearance agreement from LOC providers

By Sara Rosenberg

New York, Nov. 14 - Trenwick Group Ltd. entered into a forbearance agreement with its letter of credit providers covering the current default under the company's credit facility. The forbearance agreement is in effect through Nov. 22 but terminates earlier if there is another default under the credit facility or the forbearance agreement, a third party takes action against Trenwick for debt in excess of $5 million or the company acts in a way that the letter of credit providers consider to be adverse to their interests.

In return for the agreement, Trenwick has agreed to refrain from making some payments or distribution and to set up a meeting with the letter of credit providers and Lloyd's, according to a news release.

Discussions on renewing for an additional year the $226 million letter of credit facility in support of its Lloyds' operations are still taking place.

Trenwick is a Bermuda specialty insurance and reinsurance underwriting organization.

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