Friedman, Billings, Ramsey Group, Inc. reports that its subsidiary, Friedman, Billings, Ramsey & Co., Inc., serving as lead underwriter and bookrunner, has closed a $121.2 million follow-on offering for RLI Corp., a Peoria, Illinois-based specialty property and casualty insurer.
The transaction involved the sale of 4.8 million common shares at $25.25 per share. The underwriters have an option for a period of 30 days to purchase up to 420,000 common shares from RLI Corp. and 300,000 shares from RLI Board Chairman Gerald Stephens to cover over-allotments.
RLI expects to use net proceeds from the transaction to support premium growth in the company’s insurance operations, pay down its line of credit, and reduce the use of reinsurance.
“We continually monitor capital adequacy and surplus leverage, including the statutory premiums to surplus ratio. Given an improvement in market conditions during the last year, as well as forecasts for higher premium rates, the successful completion of this offering will clearly support further growth,” said Jonathan Michael, president and CEO of RLI Corp.
In 2002, FBR has lead-managed 20 public and seven private offerings and acted as co-manager in 15 additional transactions. This year, these transactions have raised approximately $4.3 billion.
Credit Suisse First Boston Corporation served as co-lead-manager on the transaction. Cochran, Caronia & Co., Ferris, Baker Watts, Incorporated and Fox-Pitt, Kelton served as co-managers for the offering.
RLI Corp., through its subsidiaries RLI Insurance Company, Mt. Hawley Insurance Company, Underwriters Indemnity Company and Planet Indemnity Company, underwrites selected property and casualty insurance products.
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