FFH $1B Mixed Shelf...

[Crip1]

http://www.reuters.com/article/marketsNews/idUKBNG41791620090825?rpc=44

 

For a company which, by most any measure, looks to be well capitalized, this is rather interesting. As if the flames of ORH buyout or ICICI needed any fanning...

 

-Crip

[T-bone1]

I would be surprised if they sold any more debt in the near term . . .  but I am intrigued by the idea of selling long term debt as a way of betting on inflation

[Partner24]

They do that on a usual basis. Take a look at their press releases archive.

 

http://www.fairfax.ca/Assets/Downloads/Press/fpr2008-04-18.pdf

 

http://www.fairfax.ca/Assets/Downloads/Press/fpr2007-04-02.pdf

 

etc.

[Crip1]

Philipe,

 

You're right...I looked at the story and not at the press release which clearly states that this is to "...restore the capacity which was available to Fairfax prior to its recent offering of Senior Notes which closed on August 18, 2009."

 

Apologies for the false alarm...we will now return to your regular programming.

 

-Crip

[watsa_is_a_randian_hero]

I believe the $400 million was issued under the last shelf.  Now they want to have a fresh shelf available.  Its there in case of a Katrina-like event that causes the need to raise additional capital quickly.

[Cardboard]

"...restore the capacity which was available to Fairfax prior to its recent offering of Senior Notes which closed on August 18, 2009."

 

So, $1 billion U.S. minus $400 million CDN = $630 million U.S. left (this debt issue was the only item that took away some of that capacity since the shelf was filed in April 08)

 

That is a lot of flexibility left over if you ask me combined with $880 million (+) U.S. in cash and investments + this $400 million CDN or $1.25 billion U.S. minimum currently available at holdco.

 

On top of that, if history is any guide, it takes only 7 days for that universal shelf prospectus to become final and for new securities to be issued. Nonetheless, I like people who are proactive.  ;)

 

In any case for those interested, Odyssey Re needs to trade today at $55 to roughly match Fairfax current valuation on a price to book basis.

 

Cardboard