Swiss Re raises cash

Swiss Re has raised the money for its acquisition of Lincoln Re Keystone

Swiss Re says it has raised about SFr5.5 billion ($3.3 billion) to pay for claims arising from the September 11 attacks, as well as its acquisition of Lincoln Re.

This content was published on November 15, 2001 - 12:08

The company, the world's second largest reinsurance concern, said in a statement on Thursday that it had raised the cash by selling convertible bonds and shares.

It sold 23.1 million shares to new and existing investors at SFr165.75 each, Wednesday's closing price, as well as $1 billion worth of subordinated convertible bonds to money managers.

Last month, Swiss Re said it would sell the securities to finance its $2 billion acquisition of Lincoln Re from the Lincoln National Corporation.

Swiss Re is also raising money after receiving claims from the September 11 terrorist attacks in the United States.

Earlier this month, it started paying out claims for the destruction of the World Trade Center, despite a legal wrangle with the building's leaseholders.

It handed over its $14.3 million share of an initial $75 million payment to investors behind Larry Silverstein of Silverstein Properties Inc.

That company is the operator of the World Trade Center properties and leaseholder of the complex.

The move came barely two weeks after Swiss Re filed a suit in a New York federal court seeking to limit the amount Silverstein's group can claim on its insurance policy.

Silverstein wants to claim twice on his company's $3.5 billion insurance policy, for a total payout of $7 billion, on the grounds that the destruction of the two towers constitutes two separate events.

Swiss Re has asked the court to rule the attack was one event, limiting its payout.

The payment was the first by Swiss Re, which has a 22 per cent share of the policy covering the complex, which means the Swiss firm will have to pay out about $770 million overall, or double that, if the New York court decides the attack comprised two separate events.

swissinfo with agencies

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