Section
1 – Registrant’s Business and Operations
Item
1.01:
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Entry
into a Material Definitive
Agreement
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The
information in Item 2.03 is hereby incorporated by reference.
Section
2 – Financial Information
Item
2.03:
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of the Registrant
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On
January 20, 2009, Maiden Holdings, Ltd. (the “Company”) completed a private
placement of 260,000 units (the “Units”), each Unit consisting of $1,000
principal amount of capital securities (the “Trust Preferred Securities”) of
Maiden Capital Financing Trust (the “Trust”) (an indirect wholly owned
subsidiary of the Company) and 45 common shares, $.01 par value, of the Company
(the “Common Shares”), for a purchase price of $1,000.45 per
Unit. This resulted in gross proceeds to the Company of approximately
$260,117,000, before approximately $4,100,000 of placement agent fees and
expenses. 11,700,000 Common Shares in the aggregate were issued by
the Company. Certain trusts established by Michael Karfunkel and
George Karfunkel, two of the Company’s founding shareholders, purchased an
aggregate of 159,000 of the Units. The remaining 101,000 Units were
purchased by existing institutional investors. The terms of the Trust
Preferred Securities are governed by an Amended and Restated Declaration of
Trust, dated January 20, 2009, by and among Wilmington Trust Company
(“Wilmington”), as Institutional Trustee; Wilmington, as Delaware Trustee;
Maiden NA, as Sponsor; and the Trust Administrators (as named
therein).
The Trust
used the proceeds from the sale of the Trust Preferred Securities to purchase a
subordinated debenture (the “Debenture”) in the principal amount of $260,000,000
issued by the Company’s wholly owned subsidiary, Maiden Holdings North America,
Ltd. (“Maiden NA”). The net proceeds to Maiden NA from the sale of the Debenture
to the Trust will be used to support its North American business, principally
the operations it recently acquired from GMAC RE in November 2008.
The
Debenture was issued pursuant to an Indenture dated January 20, 2009 by and
between the Maiden NA and Wilmington. The terms of the Debenture are
substantially the same as the terms of the Trust Preferred
Securities. The interest payments by Maiden NA will be used by the
Trust to pay the quarterly distributions to the holders of the Trust Preferred
Securities. The Indenture permits Maiden NA to redeem the Debenture
(and thus a like amount of the Trust Preferred Securities) at stated value plus
one year’s interest together with accrued and unpaid interest, if any, through
the date of redemption at any time until January 15, 2014. On and
after January 15, 2014, Maiden NA may redeem any or all of the Debenture (and
thus a like amount of the Trust Preferred Securities) at stated value plus
accrued and unpaid interest, if any, through the date of
redemption. If the Company redeems any amount of its Debenture, the
Trust must redeem a like amount of the Trust Preferred
Securities. The Indenture permits Maiden NA, as long as no event of
default has occurred and continues, to defer interest payments on the Debenture
for up to 20 consecutive quarterly periods, during which interest accrues and
compounds until paid.
Pursuant
to separate Guarantee Agreements dated as of January 20, 2009 (each a “Guarantee
Agreement”) with Wilmington, as guarantee trustee, each of the Company and
Maiden NA has agreed to guarantee the payment of distributions and payments on
liquidation or redemption of the Trust Preferred Securities. The
obligations of the Company and Maiden NA under their Guarantee Agreements and
the Trust Preferred Securities are subordinate to all of their respective senior
debt.
In
connection with the offering, the Company entered into a Purchase Agreement (the
“Purchase Agreement”) with the purchasers of Units pursuant to which it agreed
to file a registration statement under the Securities Act of 1933, as amended,
with respect to resales of the Common Shares on or before April 15, 2009 and to
use commercially reasonable efforts to cause such registration statement to
become effective as soon as practicable thereafter.
The
placement agent, Friedman, Billings, Ramsey & Co., Inc., received a fee of
3.5% of the principal amount of the Debenture placed with investors except for
the founding shareholders.
The
description above is qualified in its entirety by the Amended and Restated
Declaration of Trust, the Indenture, each of the Guarantee Agreements and the
Purchase Agreement filed herewith as exhibits and to which reference is
made.
Section
3 – Securities and Trading Markets
Item
3.02:
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Unregistered
Sales of Equity Securities
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The
information in Item 2.03 is hereby incorporated by reference.
The
issuance and sale of the Trust Preferred Securities and the Common Shares in the
offering was not registered under the Securities Act of 1933, as amended, in
reliance on the exemption from federal registration under Section 4(2) of the
Securities Act and/or Rule 506 promulgated thereunder, based on the Company’s
belief that the offer and sale of said securities did not involve any public
offering as each investor was “accredited” and no general solicitation has been
involved in the offering.
Section
7 – Regulation FD
Item
7.01:
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Regulation
FD Disclosure
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On
January 20, 2009, the Company announced the closing of the offering reported in
Item 2.03. A copy of the press release, as well as certain
information made available to purchasers in the offering, is furnished as
Exhibits 99.1 and 99.2, respectively, to this report.
Section
9 – Financial Statements and Exhibits
Item
9.01:
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Financial
Statements and Exhibits
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(c) Exhibits
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4.1
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Amended
and Restated Declaration of Trust, dated as of January 20, 2009, by and
among Wilmington Trust Company, as Institutional Trustee and as Delaware
Trustee, Maiden Holdings North America, Ltd., as Sponsor, and the
Administrators (as named therein).
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4.2
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Indenture,
dated January 20, 2009, between Maiden Holdings North America, Ltd. and
Wilmington Trust Company, as Trustee, relating to Fixed Rate Subordinated
Deferable Interest Debentures Due 2039 (including the form of
debenture).
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4.3
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Guarantee
Agreement, dated as of January 20, 2009, by and between Maiden Holdings,
Ltd., as Guarantor, and Wilmington Trust Company, as
Trustee.
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4.4
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Guarantee
Agreement, dated as of January 20, 2009, by and between Maiden Holdings
North America, Ltd., as Guarantor, and Wilmington Trust Company, as
Trustee.
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10.1
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Form
of Purchase Agreement entered into between Maiden Holdings, Ltd., Maiden
Capital Financing Trust, Maiden Holdings North America, Ltd. and various
institutional investors dated as of January 14,
2009.
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99.1
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Press
release dated January 20, 2009.
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99.2
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Presentation
to purchasers in the offering.
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