Global Indemnity LTD Floats a New Note Issue [/paste:font]
March 20, 2017
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Specialty insurer and reinsurer
Global Indemnity LTD (NASDAQ:GBLI) has sold a new subordinated note issue with a long duration maturity.
GBLI is a Cayman Islands based insurer that insures specialty risks such as medical and professional liability insurance, collectibles insurance and property and casualty insurance for small businesses. While the company is not a large company they are rated “A”, excellent, by AM Best. Profits for the last year ended 12/31/2016 were strong with investment income contributing a large portion of their net income.
The new notes have a very nice coupon of 7.875% which is one of the highest available coupons in the baby bond arena and we would not be afraid to purchase this issue from a safety perspective. However, because the maturity date of this new issue isn’t until 2047 we simply won’t be buying any issues with a maturity date this far out. Over time if the interest rate hiking cycle continues this issue will drift lower. GBLI currently has a
7.75% baby bond outstanding (NASDAQ:GBLIZ) with a 2045 maturity date and that issue is trading at $24.95, indicating the new issue should trade in the $25 to $25.25 area once it begins trading.
The company will use the proceeds from this offering for general corporate purposes, meaning they can use the money for almost any reason they would like.
Details of this issue can be found here.
Because it is a baby bond we would not expect OTC Grey market trading, but there is always a chance some brokers may have the ability to offer shares prior to NASDAQ trading.