Business Context and Reporting Period
Company: GREENLIGHT CAPITAL RE, LTD.
Filing Type: Form 8-K (Current Report)
Date: February 03, 2011
Context: The Company, a Cayman Islands entity, reported the entry into a material definitive agreement by its wholly owned subsidiary, Greenlight Reinsurance, Ltd.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or existing debt levels. The primary financial metric disclosed is the establishment of a new credit facility:
- Facility Amount: $50 million letter of credit.
- Counterparty: JP Morgan Chase Bank, N.A.
- Initial Maturity: January 27, 2012.
- Extension Terms: Automatically extends for one additional year unless terminated with 120 days' prior written notice.
Material Changes
The material change reported is the creation of a direct financial obligation through the $50 million letter of credit facility. The filing does not provide comparative data against prior periods as it is a current event report rather than a periodic financial statement.
Guidance, Risks, and Covenants
Covenants and Restrictions: The Facility includes customary events of default and covenants, specifically:
- Limitations on indebtedness.
- Restrictions on liens on collateral.
- Constraints on mergers and sales of assets.
- Limitations on lines of business and restricted payments.
- Change of control default provision.
- Collateral maintenance requirements.
Costs: The Company is obligated to pay utilization and certain other fees as detailed in a separate facility fee letter.
Investor Verification Checklist
- Verify the specific terms and interest rates in the separate facility fee letter referenced in the filing.
- Confirm the nature and sufficiency of the collateral pledged under the Collateral Agreement.
- Assess the impact of the new indebtedness covenants on the Company's future operational flexibility.
- Review the Company's liquidity position to ensure compliance with collateral maintenance requirements.