Peak Re raises $250m via perpetual guaranteed securities

Peak Re (BVI) Holding, the wholly owned subsidiary of Hong Kong-based global reinsurer Peak Reinsurance Company that also has operations in Bermuda, has issued $250 million of perpetual subordinated guaranteed capital securities at 5.35 percent.

The Securities are rated Baa2 by Moody’s, and unconditionally and irrevocably guaranteed by Peak Re, which is currently rated A3 by Moody’s. The issuance will strengthen Peak Re’s capital base and increase its underwriting capacity.

The securities generated orders of $1.1 billion, representing a 4.4 times over-subscription. It is the first public capital instrument in perpetual hybrid format issued by a Hong Kong-based global reinsurer.

Franz Josef Hahn, chief executive officer of Peak Re, called the transaction “a significant milestone for Peak Re,” noting that the issuance diversified its capital structure and gave it additional capacity.

“Our business has shown resilience to the current pandemic, and with the hardening of the reinsurance market, the new capital will enable Peak Re to capture the growth opportunity ahead,” he added.