Business Context and Reporting Period
Company: GREENLIGHT CAPITAL RE, LTD.
Filing Type: Form 8-K (Current Report)
Date of Report: August 7, 2018
Event: Entry into a Material Definitive Agreement regarding a notes offering and concurrent share repurchase.
Key Financial Metrics and Transaction Details
- Debt Issuance: $100.0 million aggregate principal amount of 4.00% convertible senior notes due 2023.
- Interest Rate: 4.00% per annum.
- Maturity Date: August 1, 2023.
- Conversion Terms:
- Conversion Rate: 58.1818 Class A ordinary shares per $1,000 principal.
- Conversion Price: Approximately $17.19 per share.
- Premium: Approximately 25% over the closing sale price on August 2, 2018.
- Settlement: Cash, shares, or a combination at the Company's option.
- Share Repurchase: 1,000,000 Class A ordinary shares repurchased at $13.75 per share.
- Repurchase Cost: $13,750,000 (funded from net proceeds of the Notes).
- Use of Proceeds: Remaining net proceeds to be used for contributions to capital and surplus of reinsurance subsidiaries and general corporate purposes.
Material Changes
This filing represents a material change in the Company's capital structure through the incurrence of $100.0 million in new debt obligations and a reduction in outstanding equity via the repurchase of 1 million shares. The filing does not provide comparative financial metrics (revenue, profit, cash flow) for the period as it is a transaction-specific report rather than a periodic financial statement.
Outlook, Risks, and Contingencies
- Regulatory Status: The Notes and shares issuable upon conversion are unregistered under the Securities Act of 1933 and were sold to qualified institutional buyers under Rule 144A.
- Liability: The Notes are general unsecured obligations of the Company.
- Disclosure Note: Information regarding the press release (Exhibit 99.1) is deemed "furnished" and not "filed" for purposes of Section 18 of the Exchange Act.
Investor Verification Checklist
- Verify the full text of the Indenture (Exhibit 4.1) for specific conversion conditions and covenants.
- Confirm the exact closing price of Class A ordinary shares on August 2, 2018, to validate the 25% premium calculation.
- Review the Company's subsequent 10-Q or 10-K filings to assess the impact of the new debt on leverage ratios and liquidity.
- Monitor the Company's capital contributions to its reinsurance subsidiaries as intended by the use of proceeds.