Business Context and Reporting Period
Company: GREENLIGHT CAPITAL RE, LTD.
Filing Type: Form 8-K (Current Report)
Date of Report: August 20, 2010
Event Date: August 20, 2010 (Agreement Execution); October 12, 2010 (Anticipated Effective Date)
The Company entered into a new committed letter of credit issuance facility agreement with Citibank Europe plc to replace an existing facility with Citibank N.A.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or liquidity metrics. It discloses the following financial obligation:
- New Facility Amount: $400,000,000 committed letter of credit issuance facility.
- Counterparty: Citibank Europe plc.
- Utilization Fees: To be paid as set forth in a separate facility fee letter (specific rates not disclosed).
Material Changes Versus Prior Period
The Company is replacing its "Original Facility" (dated October 12, 2005, with Citibank N.A.) with a new facility. The Original Facility is scheduled to terminate on October 12, 2010, coinciding with the anticipated effective date of the new agreement.
Guidance, Outlook, and Risks
Terms and Conditions:
- Effective Date: Anticipated to be October 12, 2010, subject to customary conditions precedent.
- Term: One year from the Effective Date, with an automatic extension of 364 days unless either party provides written notice of cancellation at least 120 days prior to the termination date.
- Post-Termination: Termination of the facility does not affect outstanding credits at the time of termination, and the Bank may continue to provide the facility on an uncommitted basis.
Risks and Covenants:
- The agreement includes customary events of default and covenants.
- Specific covenants include limitations on liens on collateral, letter of credit collateralization requirements, and a change of control default provision.
Investor Verification Checklist
- Verify the fulfillment of conditions precedent required for the October 12, 2010 effective date.
- Review the separate facility fee letter to determine specific utilization fees and costs.
- Confirm the status of the termination of the Original Facility with Citibank N.A.
- Assess the impact of the change of control default provision on the Company's strategic flexibility.