Dropped 25% in 3 hours.....
Yep. Did anyone ever expect to see FFH with a 4% dividend yield?
SJ
FFH's dividend will be no more.....the company (at the holdco) is severely cash restrained....and that was before this drop.
Anyone else suspect that Omers will look to find a way out of its plan (act of God/force de majeure) to buy into Riverstone UK for $600 million?
Forget about funding the growth of the insurance subs in the so-called hard market. Highly likely that insurance premiums will not be paid.
And lets not forget about the devastation across its equity book (both public and private equities):
-Atlas Corp (formerly Seaspan)
-Blackberry
-Recipe
-Eurobank
-Resolute Forest
-etc
Let's hope that Brian Bradstreet, the real brains behind the investment team at FFH, worked his magic yet again and sold out of all fixed income positions at the optimum time although this will only help so much.
Comments/thoughts?
Mostly in agreement, but I would caution that the next scheduled divvy is 11 months away, so lots of things can change in that time. But, I would agree that if they were contemplating the announcement of a divvy for payment at the end of May, it would probably be best to nix it because they'd need to float a debt offering to make it happen.
The nice thing about OMERS is that usually they are swimming in cash, looking for places to put it. With some deals, financing is a constraint and the Riverstone deal could fall through because of that. If OMERs finds a way to back out, it's because they have found better places to park their money (that would be understandable).
The hardening market is interesting. How much capital has left the industry in the past 6 weeks? I am a little less worried about people dropping their policies than I am about the state of reinsurers, as FFH has enormous reinsurance receivables (we've been there before, dealing with the "can't pays" and the "won't pays").
SJ
