We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
W.R. Berkley Corporation (WRB - Free Report) has offered $175 million of 5.70% Subordinated Debentures, scheduled to mature in 2058. The company anticipates this offering to be completed on Mar 26, 2018, subject to satisfaction of customary closing conditions.
The company has also given the underwriters an option to buy an additional $26.3 million of such debentures in order to cover overallotments, if the need arises. This option can be exercised for 30 days from the date of the prospectus supplement.
The company will deploy the net proceeds from the offering in general corporate purposes.
It seems a prudent approach by the property and casualty (P&C) insurer to procure funds, leveraging the still low interest rate environment, thereby lowering the interest burden. This is in turn will enable the company to facilitate margin expansion.
Historically, the company has been generating a solid operational as well as underwriting performance and this will aid the P&C insurer to service debt uninterruptedly, thus maintaining credit worthiness.
As of Dec 31, 2017, the company’s long-term debt was $2.49 billion compared with $2.48 billion at the end of 2016, reflecting a 0.4% increase. The debt-to-equity ratio was 46.1% at the end of Dec 31, 2017 compared with 49.3% at year-end 2016. Following the issuance of these debentures, debt to equity ratio will increase to 49.4%, representing a 330 basis points rise. The issuance of the aforementioned debentures will thus increase the company’s financial leverage and interest obligations in the short term.
Rating Agency Jumps Into Action
Following the issuance of these subordinated debentures, credit rating giant A.M. Best has assigned a Long-Term Issue Credit Rating of “bbb+” to these debentures. W.R. Berkley and its subsidiaries did not see any change in the existing ratings. The outlook of the assigned rating remained stable.
The rating agency expects leverage and coverage to decline in 2019 with two senior notes amounting to nearly $450 million, anticipated to be redeemed on maturity. However, the credit rating giant estimates the company to generate sustained operational performance in the future while maintaining a robust risk-adjusted capitalization and moderate financial leverage.
Zacks Rank and Share Price Movement
Currently W.R. Berkley carries a Zacks Rank #3 (Hold). Shares of W.R. Berkley have underperformed the industry in a year’s time. The stock has gained 0.3% compared with the industry’s rally of 17.4%. We expect continued premium growth, improved investment income and a solid capital as well as liquidity position to turn the stock around in the near term.
Radian Group offers mortgage and real estate products and services in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 7.9%.
CNO Financial develops, markets and administers health insurance, annuity, individual life insurance and other insurance products for senior and middle-income markets in the United States. The company posted positive surprises in the last four quarters with an average beat of 23.9%.
CNA Financial provides commercial property and casualty insurance products primarily in the United States. The company pulled off positive surprises in the trailing four quarters with an average beat of 46.9%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
W.R. Berkley Prices Subordinated Debentures, Receives Rating
W.R. Berkley Corporation (WRB - Free Report) has offered $175 million of 5.70% Subordinated Debentures, scheduled to mature in 2058. The company anticipates this offering to be completed on Mar 26, 2018, subject to satisfaction of customary closing conditions.
The company has also given the underwriters an option to buy an additional $26.3 million of such debentures in order to cover overallotments, if the need arises. This option can be exercised for 30 days from the date of the prospectus supplement.
The company will deploy the net proceeds from the offering in general corporate purposes.
It seems a prudent approach by the property and casualty (P&C) insurer to procure funds, leveraging the still low interest rate environment, thereby lowering the interest burden. This is in turn will enable the company to facilitate margin expansion.
Historically, the company has been generating a solid operational as well as underwriting performance and this will aid the P&C insurer to service debt uninterruptedly, thus maintaining credit worthiness.
As of Dec 31, 2017, the company’s long-term debt was $2.49 billion compared with $2.48 billion at the end of 2016, reflecting a 0.4% increase. The debt-to-equity ratio was 46.1% at the end of Dec 31, 2017 compared with 49.3% at year-end 2016. Following the issuance of these debentures, debt to equity ratio will increase to 49.4%, representing a 330 basis points rise. The issuance of the aforementioned debentures will thus increase the company’s financial leverage and interest obligations in the short term.
Rating Agency Jumps Into Action
Following the issuance of these subordinated debentures, credit rating giant A.M. Best has assigned a Long-Term Issue Credit Rating of “bbb+” to these debentures. W.R. Berkley and its subsidiaries did not see any change in the existing ratings. The outlook of the assigned rating remained stable.
The rating agency expects leverage and coverage to decline in 2019 with two senior notes amounting to nearly $450 million, anticipated to be redeemed on maturity. However, the credit rating giant estimates the company to generate sustained operational performance in the future while maintaining a robust risk-adjusted capitalization and moderate financial leverage.
Zacks Rank and Share Price Movement
Currently W.R. Berkley carries a Zacks Rank #3 (Hold). Shares of W.R. Berkley have underperformed the industry in a year’s time. The stock has gained 0.3% compared with the industry’s rally of 17.4%. We expect continued premium growth, improved investment income and a solid capital as well as liquidity position to turn the stock around in the near term.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Radian Group (RDN - Free Report) , CNO Financial Group (CNO - Free Report) and CNA Financial Corporation (CNA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radian Group offers mortgage and real estate products and services in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 7.9%.
CNO Financial develops, markets and administers health insurance, annuity, individual life insurance and other insurance products for senior and middle-income markets in the United States. The company posted positive surprises in the last four quarters with an average beat of 23.9%.
CNA Financial provides commercial property and casualty insurance products primarily in the United States. The company pulled off positive surprises in the trailing four quarters with an average beat of 46.9%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>