Axis Capital Holdings Sells a Large Preferred Offering

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Reinsurance company Axis Capital Holdings LTD (NYSE:AXS) has sold a 22,000,000 share preferred stock offering with the typical stingy coupon of 5.50%.  The company is investment grade rated so this coupon was expected.

The shares are trading on the OTC Grey Market under the temporary ticker of AXHHF and has traded in the $24.65 to $24.85 range since trading began.

Further details of the issue can be found here.


AXS has been a solidly profitable company and the level of safety in the issue is very good, but as is typical for insurance companies the shares are non-cumulative in respect to dividends.  The shares have the typical 5 year optional redemption period.

The company intends to use the proceeds of this offering to redeem their AXS-C preferred issue which carries a 6.875% coupon.  This can not occur until 4/15/2017 which is the 1st redemption date, but in the meantime the company may purchase some of these shares in the open market and as of the date of the new offering they had agreed to purchase over 1,200,000 shares of the C issue.

With the recent drubbings that preferred stocks have taken we do not expect that these shares will be trading much, if any, higher than $25 anytime soon.

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