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ACP Re Holdings takes over $250 million credit agreement, amends terms
By Tali Rackner
Norfolk, Va., Sept. 21 – ACP Re Holdings, LLC entered into a $250 million amended and restated credit agreement on Tuesday with administrative agent AmTrust Financial Services, Inc., according to an 8-K filing with the Securities and Exchange Commission.
The agreement now matures on Sept. 20, 2036, extended from Sept. 15, 2021 previously.
Among the restated terms, interest on the outstanding principal balance is a fixed annual rate of 3.7%, payable in cash, semiannually in arrears, provided that up to 1.2% thereof may be paid in-kind.
Beginning on Sept. 20, 2026, and for every year thereafter, 2% of the then-outstanding principal balance of the loan is due and payable.
CastlePoint National Insurance Co., a subsidiary of ACP Re Ltd., is the original borrower of the credit agreement. CastlePoint is in conservation under the supervision of the Commissioner of Insurance of the State of California.
As part of the reorganization in the conservation, the Michael Karfunkel Family 2005 Trust and members of the Karfunkel family made a $200 million contribution to CastlePoint, and ACP Re Holdings is taking over the credit agreement with amended terms.
Also under the amendment, the trust will cause ACP Re Holdings to maintain assets having a value greater than 115% of the value of the then-outstanding loan balance, and if there is a shortfall, the trust will make a contribution to ACP Re Holdings of assets having a market value of at least the shortfall (maintenance covenant).
In addition, at the lenders’ discretion, ACP Re Holdings may repay the loan using cash or tradeable stock of an equivalent market value of any publicly traded company on the New York Stock Exchange, Nasdaq Stock Exchange or London Stock Exchange.
Finally, a change of control of more than 50% and an uncured breach of the maintenance covenant are included as events of default.
ACP Re is a Bermuda-based reinsurance company.
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