Peak Re raises $250m growth capital to take on hardening reinsurance market

Hong Kong-based Peak Re has raised $250 million by issuing public hybrid securities to strengthen its capital base and increase its underwriting capacity, as the reinsurer looks to take advantage of the hardening market.

The reinsurer's subsidiary Peak Re (BVI) Holding has completed the issuance of $250 million of perpetual subordinated guaranteed capital securities at 5.35 per cent.

The transaction marks the first public capital instrument in perpetual hybrid format issued by a Hong Kong-based global reinsurer.

It resulted in a final orderbook of $1.1 billion and represents 4.4 times over-subscription.

The company said that the demand for the transaction demonstrated strong interest from high quality global investors for investment grade hybrid capital securities, and their confidence in Peak Re’s business outlook.

Franz Josef Hahn, chief executive officer of Peak Re, said: "The transaction marks a significant milestone for Peak Re. The Securities will enable the Company to diversify its capital structure, and bring additional capacity to the reinsurance market from international investors. Our business has shown resilience to the current pandemic, and with the hardening of the reinsurance market, the new capital will enable Peak Re to capture the growth opportunity ahead.”

Cathy Chen, chief financial officer of Peak Re, added: “The success of this Transaction reflects the confidence of investors in our vision and strategies, and their recognition of the Company’s achievements. This is a key step for the Company to ensure sustained growth and deliver our founding promise: to support the needs of communities and emerging middle-class societies in Asia and beyond. I would like to thank the team for their contribution and hard work to make this achievement possible.”