Enstar gets $600 million one-year unsecured letter-of-credit facility

By Sarah Lizee

Olympia, Wash., Aug. 7 – Enstar Group Ltd. and subsidiary Cavello Bay Reinsurance Ltd. entered into $600 million one-year unsecured letter-of-credit facility agreement on Monday with National Australia Bank Ltd., London Branch as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

National Australia Bank and Bank of Nova Scotia are joint bookrunners, joint lead arrangers and syndication agents.

Cavello Bay will draw $445 million of letters of credit under the facility agreement and post them as collateral in connection with an adverse development cover provided to Maiden Reinsurance Ltd.

Interest is Libor plus 90 basis points. The commitment fee is 30 bps.

Cavello Bay has the option to increase the commitments in an aggregate amount up to $75 million from the existing lenders or through the addition of one or more new lenders.

The company may also request up to three one-year extensions of the facility.

There are various financial and business covenants in the agreement.

Enstar is a Hamilton, Bermuda-based insurance provider.

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