IPO Filing: Flagstone Reinsurance

By Douglas A. McIntyre Published Mar 6, 9:12AM EST

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Flagstone Reinsurance Holdings Limited has filed to come public via an IPO under the "FSR" ticker on NYSE. It has noted $175 million in share sales to be the amount, but that is for filing purposes only. The underwriting group is rather large with Lehman & Citigroup as the lead underwriters and others in the syndicate are as follows: JPMorgan, Credit Suisse, Wachovia, KBW, Dowling & Partners, Fox-Pitt Kelton, & Cochran Caronia Waller.

This Bermuda-based re-insurer writes primarily property, property catastrophe and short-tail specialty and casualty reinsurance. It diversifies its risk zones by geographic diversification as well. It claims that substantially all of its reinsurance contracts contain loss limitation provisions such as fixed monetary limits to our exposure and per event caps; and specializes in underwriting low-frequency and high severity risks where it has enough data to justify the coverage. Its specialty lines include aviation, energy, accident and health, satellite, marine and workers’ compensation catastrophe.

Flagstone has raised approximately $850 million through three closings of a private placement of common shares and the issuance of debentures. Through the year ended December 31, 2006, it had $302.5 million in gross premiums written, of which $219.1 million was property catastrophe reinsurance. A.M.Best has affirmed an "A-" credit rating (excellent) to its insurance exposure and financial strength.

Lehman (LEH-NYSE) owns some 22.1% of the company, but since Lehman has a market cap of over $30 Billion you cannot really consider this a true backdoor play or a huge "unlocking of value" for Lehman that would make a significant ‘investable’ contribution to its balance sheet. Other key ownership is followed by Haverford wiuth 13.9% ownership, and followed by Silver Creek entities with 13.7% ownership.

Jon C. Ogg
March 6, 2007

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.