Kingsway Financial Services entered into a C$150 million, 364-day revolving credit facility that replaces an existing C$150 million, 364-day facility set to expire March 3. The property and casualty insurer may use the funds for acquisitions, though it has not yet made that decision. "It gives us the flexibility and it would give us funds available to do that that," said W. Shaun Jackson, cfo. He would not comment on pricing.
The company has done a couple of acquisitions recently, including a small one of Zephyr Insurance in the fourth quarter of 2005. Jackson would not comment on specifics. "We are a holding company that owns a number of specialty insurer companies and Zephyr really fits that mold. It is a profitable, niche insurance company so we bought it because we felt it would be a good investment...so far it has been," Jackson said.
Scotia Capital and LaSalle Bank are the co-lead arrangers on the refinancing. Jackson said the company has had a long-term relationship with both banks. The old facility was led by Scotia, LaSalle and CIBC World Markets, but CIBC was not approached on the new deal. Instead, Jackson said he asked the two other banks if they would be interested in increasing their allocation. "We just felt it was easier to deal with two lenders for the size it was. Both LaSalle and Scotia were comfortable increasing their participation from C$50 million to C$75 million, so that seemed like the best solution for us," he said.