Everest Re Group Ltd.’s RE wholly-owned subsidiary, Everest Reinsurance Holdings, Inc. announced the pricing of $1 billion aggregate principal amount of senior unsecured notes. The notes carry an interest rate of 3.500% and are scheduled to mature in 2050.
The company aims to deploy the net proceeds for general corporate purposes.
The company issued senior notes amid a low interest rate environment to get hold of more funds and enhance financial flexibility without affecting its liquidity. As of Jun 30, 2020, cash balance increased about 45.2% to $1.8 billion from 2019 end level.
By capitalizing on the low interest rate environment, the company is also attempting to reduce its interest burden, thus facilitating margin expansion. Also, the company’s operational strength should enable it to service debt uninterruptedly, thereby maintaining the stock’s creditworthiness.
As of Jun 30, 2020, total debt of the company was about $621 million, which decreased 2.1% from