WR Berkley Prices Baby Bonds

WR Berkley (WRB) has priced their new issue of subordinated debentures with a fixed rate coupon of 5.10%.

The issue is investment grade.

Maturity is way out in 2059, with an early redemption period starting in 2024.

There will be no OTC market trading, but one may be able to purchase shares (bonds) prior to exchange trading with a call to the brokerage with the CUSIP.

The company can defer interest payments for up to 5 years multiple times without it being declared in default.

The pricing term sheet can be seen here.

7 thoughts on “WR Berkley Prices Baby Bonds”

  1. “ The company can defer interest payments for up to 5 years multiple times without it being declared in default.”

    That’s not true of their other baby bonds, correct? Don’t recall seeing that in there previously.

    1. LI – From WRB-B prospectus: “We have the right on one or more occasions to defer the payment of interest on the debentures for up to five consecutive years (each such period, an “optional deferral period”). During an optional deferral period, interest will continue to accrue at the interest rate on the debentures, compounded quarterly as of each interest payment date to the extent permitted by applicable law.”

    1. Bill, I agree, and it is made worse by the fact that it is a perpetual i.e., there is no mature date to curb the loss or to bring it back up.

      1. bill o and Libero – But how does what you predict differ from any other perpetual that’s been issued in the last few months? There doesn’t seem to be any specific concern specific to WRB-F in what you’re saying is there? What currently issued perpetual will not do what you’re predicting when interest rates go up? If it’s priced right today and rates go up, they’ll all go down or am I missing your point?

        1. 2whiteroses, you are correct, my comments were “in general” not specific to WRB-F. All low yield perpetuals could drop and stay down if interests rates go up. I cant risk having a perpetual sink and stay there for years so I use stop limits with perpetuals but as you know they are nuisance as they can trip.

  2. Reasonable coupon for BAA2 in this market. Still not interested in low coupon issues. Pass

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