Atlas Financial gets Cayman court approval of 6.625% notes scheme

By Sarah Lizee

Olympia, Wash., March 1 – Atlas Financial Holdings, Inc.’s scheme of arrangement regarding the restructuring and exchange of its 6.625% senior notes was approved by the Grand Court of the Cayman Islands on Friday, according to a press release.

The company said this follows an overwhelming support for the restructuring, with holders representing about 99.34% of the notes voting in favor of the scheme.

Under the scheme, the notes will be canceled and exchanged for new securities on or around April 26.

The accrued interest on the notes as of the date the new notes are issued will effectively be added onto the principal of the new notes.

The new notes will have a maturity date of April 27, 2027, will be unsecured, have a par value of $25 per note and have an interest rate of 6.625% per annum if paid in cash and 7.25% per annum if paid in kind. The paid-in-kind option allows the company to pay interest in kind for up to two years from the date the new notes are issued.

The company will also have the option to redeem the new notes after three years at the principal amount to be redeemed, plus any accrued interest, with no penalty.

Atlas said it intends to use the extended maturity of the new notes to execute on its technology and analytics driven managing general agency strategy, with the objective of creating value for all stakeholders.

As previously planned as a condition precedent to effectuating the scheme, the company intends to begin a recognition proceeding under Chapter 15 of the U.S. bankruptcy code. Atlas said the filing will not impact day-to-day operations.

DLA Piper LLP (US) is acting as restructuring legal counsel to the company, together with Conyers Dill & Pearman LLP retained as Cayman Islands local counsel, in connection with the restructuring.

The notes were originally issued on April 26, 2017.

The financial services holding company is based in Schaumburg, Ill.

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