A wholly owned subsidiary of Fairfax Financial Holdings Ltd. established a US$300 million secured letter of credit facility through a syndicate of Canadian, US and European banks. The deal closed in December 2003. BMO Nesbitt Burns Inc. acted as lead arranger and sole bookrunner in connection with this facility.
The facility provides for the issuance of letters of credit to support internal reinsurance obligations in favour of other Fairfax subsidiaries. The facility involved a security package that included arrangements effectively securing certain trust assets comprised of premiums on Fairfax’s corporate insurance cover ultimately reinsured with a Swiss Re subsidiary.
Fairfax was represented by Torys LLP, with a team that included Cameron Koziskie, Scott Kraag and Boris Nevelev in Toronto and Jay Romagnoli and Carl Walker in New York. The banking syndicate was represented in Canada by Russel Kowalyk of Fraser Milner Casgrain LLP; and in the US by White & Case LLP in New York, with a team that included David Koschik and Josh Thompson.