Kiln raises $30 million to support Lloyd's syndicate

LONDON—Lloyd's of London insurer, Kiln P.L.C. has raised a further $30 million in capital through a bond issue. The capital will be used to support Kiln's growth plans for its managed syndicate.

The London based company issued the subordinated debt yesterday. The notes, which mature in 2036, qualify as lower tier two regulatory capital. They have been assigned a rating of bbb by A.M. Best Co. Inc.

The proceeds of the debt issue will be used to increase Kiln's participation on Lloyd's syndicate 510 and to fund its increased funds at Lloyd's requirements for the 2007 year of account, according to Best.

In June Kiln announced that it would increase its capacity in the Lloyd's market to over £1 billion for 2007, an increase of 25% on 2006. At the time the company said in a statement that it intends to increase the capacity of syndicate 510 by almost 18% to £735 million ($1.4 billion) while almost doubling the capacity on its catastrophe syndicate 557.

Last month Kiln raised $35 million through a separate subordinated debt issue. The company said in a statement that the proceeds of the October bond issue would be used to finance an expected 32% increase in underwriting for next year following the acquisition of capacity from names during the Lloyd's auctions.

Following its success at the auctions, Kiln will increase its underwriting share on syndicate 510 from £294.6 million in the 2006 calendar year to £388.8 million for 2007.