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A_Hamilton

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  1. I would argue that reputationally it is very poor form to fleece one's asset management clients by foisting material dilution on them because of a formula that was set ex-ante and with a stock that has traded very poorly. In the long term I think doing the right thing will lead them to much better opportunities here, heck maybe FIH trades at a premium to book one day and they can issue a bunch of stock and drive more fees to say nothing of all of the other relationships FFH has.
  2. I'd close out, was a great trade at a silly price, less attractive now. The other thing is that TRS are priced at SOFR + a spread, so this isn't necessarily cheap capital.
  3. The issue for Pacwest wasn't the loan quality or the yield they were earning. The problem for PACW was that they were seeing deposit outflows and were having to fund these with wholesale funding / using up their FHLB/discount window etc lines. The rationale for selling is that you get rid of the risk that you need to fully fund the incremental $1.7 billion (on top of the $2.3 billion already outstanding) of borrowings as these projects get completed. Too, in the current environment there is some extension risk if the deal sponsor can't find another bank to take a traditional 1st or, more troublesome, was developing on spec and can't service the loan. The mark here so close to par and the low LTV's on completion cost suggest that across the book as long as thereisn't fraud and disbursements to builders are properly done based on completion milestones, these should be money good. In any case, the overall reason for PACW to sell was to bring more liquidity on its balance sheet and get rid of a contingent but known call on liquidity.
  4. TRV reported $459 million in pre-tax losses from Elliott versus $305 million in Uri quarter. ALL $779 million in Cat losses ($478 due to Elliott) versus $590 million for Uri. Hannover reported $190 million in losses versus $133 for Uri. I don't know how retentions have grown/ Hannover certainly has more NE exposure, but it seems this was a pretty big hit for the primary guys.
  5. No. I'd bet dollars to donuts that its is somehow tied to the counterparties involved in the total return swaps. The price moves are small and the volumes are huge suggesting that two parties have either long or short exposure and need to swap them out and both are afraid of moving price too much.
  6. Any thoughts on losses from the December deep freeze throughout the U.S. and then these California floods? Hard to know how much loss content there will be on the reinsurance side, but I imagine the primary side will feel it industry wide.
  7. That isn't how it works. The multiple voting shares cannot ever be more than 41.8% of the vote per the proxy. The difference has to be made up with subordinate voting shares which have a minimum of 58.2% of the vote.
  8. I think you'd need share count to go well below that. Based on my understanding, Prem gets 41.8% of the voting rights (max) via the multiple voting shares. That leaves the subordinate voting shares with 58.2% of the vote. Prem controls 794,000 of these giving him 43.9% of the vote. In order to get 6.1% of the incremental vote at current levels Prem would need to own another 2.3 million shares at current levels. At current that is ~$1.35 billion of stock. Even if share count comes down by a few million shares, the price per share will appreciate and the cost to take true 50%+ control will be exorbitant. This all says nothing of the board's fiduciary duties around allowing a true change in control which would be above and beyond this.
  9. Answering my own question here. Would be very difficult for Prem to get control via share repurchases as he would need to control like 15% of the subordinate voting shares on top of the multiple voting shares, and he is nowhere close.
  10. Definitely aware these won't be sold. There is reference in the proxy to Sixty Two having subsidiaries in which it only owns 75%, but that doesn't necessarily mean there is more than one owner of Sixty Two. Relatedly, I'm curious if as FFH buys in more shares, and Prem's voting control gets closer to 50% whether there will be a change in control / premium issue that comes up. It is a very odd structure given that it will fall away 5 years after Prem exits the company / passes away (hopefully a long time from now).
  11. Does anyone know if Prem is the only owner of Sixty Two, the vehicle in which he owns all of his multiple voting shares in FFH? Thanks.
  12. I've really thought Sokol got a disproportionately raw deal in the Lubrizol scandal. However, the link above does not help to restore his reputation. Why would you get involved in this in any way shape or form? Just poor judgement on his part...again.
  13. I guess I disagree re: FFH's book loss. One has to include the deficiency in fair value from non-insurance associates. It is part of the investment book and real. FFH would be down ~12% with this included. Nonetheless, I don't think it matters all that much given the growth rates here and strong combined ratios...
  14. I'd like to see them just keep it on hand to fund premium growth and or begin reducing equity investments to tangible capital. I don't know why they always insist on living on the edge as it relates to liquidity and investment portfolio. Thankfully Bradstreet has kept them so short in duration this time around.
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