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Kingstone Reduces Debt By 25% and Extends Maturity to June 2026

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Kingstone Companies, Inc. (NASDAQ:KINS) has announced a significant debt restructuring initiative. The company has entered into a new Note Exchange Agreement with existing noteholders to refinance $19.95 million of outstanding 12% Senior Notes due December 30, 2024. Under the new agreement, Kingstone will issue $14.95 million in new 13.75% Senior Notes due June 30, 2026, along with $5 million in cash. This move effectively reduces the company's debt by 25% and extends the maturity date by 18 months. Additionally, the expiration date for warrants issued in 2022 will be extended to June 30, 2026. The exchange is set to close on September 12, 2024. CEO Meryl Golden emphasized that this refinancing will enhance financial flexibility and allow for focus on profitable growth opportunities.

Kingstone Companies, Inc. (NASDAQ:KINS) ha annunciato un'importante iniziativa di ristrutturazione del debito. L'azienda ha stipulato un nuovo Accordo di Scambio di Note con i detentori esistenti per rifinanziare 19,95 milioni di dollari di 12% Senior Notes in scadenza il 30 dicembre 2024. Ai sensi del nuovo accordo, Kingstone emetterà 14,95 milioni di dollari in nuove 13,75% Senior Notes in scadenza il 30 giugno 2026, insieme a 5 milioni di dollari in contante. Questa mossa riduce efficacemente il debito dell'azienda del 25% e prolunga la data di scadenza di 18 mesi. Inoltre, la data di scadenza per i warrant emessi nel 2022 sarà prorogata al 30 giugno 2026. Lo scambio si chiuderà il 12 settembre 2024. Il CEO Meryl Golden ha sottolineato che questo rifinanziamento migliorerà la flessibilità finanziaria e permetterà di concentrarsi su opportunità di crescita redditizie.

Kingstone Companies, Inc. (NASDAQ:KINS) ha anunciado una importante iniciativa de reestructuración de deuda. La compañía ha llegado a un nuevo Acuerdo de Intercambio de Notas con los tenedores existentes para refinanciar 19.95 millones de dólares de Notas Senior al 12% con vencimiento el 30 de diciembre de 2024. Bajo el nuevo acuerdo, Kingstone emitirá 14.95 millones de dólares en nuevas Notas Senior al 13.75% con vencimiento el 30 de junio de 2026, junto con 5 millones de dólares en efectivo. Este movimiento reduce efectivamente la deuda de la empresa en un 25% y extiende la fecha de vencimiento por 18 meses. Además, la fecha de vencimiento de los warrants emitidos en 2022 se extenderá hasta el 30 de junio de 2026. El intercambio está programado para cerrarse el 12 de septiembre de 2024. La CEO Meryl Golden enfatizó que este refinanciamiento mejorará la flexibilidad financiera y permitirá enfocarse en oportunidades de crecimiento rentables.

Kingstone Companies, Inc. (NASDAQ:KINS)은 중요한 채무 재구성 계획을 발표했습니다. 회사는 기존 채권자와 새로운 채권 교환 계약을 체결하여 1,995만 달러의 12% Senior Notes(2024년 12월 30일 만기)를 재융자합니다. 새로운 계약에 따라 Kingstone은 1,495만 달러의 새로운 13.75% Senior Notes(2026년 6월 30일 만기)를 발행하고 500만 달러 현금을 제공합니다. 이 조치는 사실상 회사의 채무를 25% 줄이고 만기일을 18개월 연장합니다. 또한, 2022년에 발행된 워런트의 만료일도 2026년 6월 30일로 연장됩니다. 교환은 2024년 9월 12일에 종료될 예정입니다. CEO Meryl Golden은 이 재융자가 재정적 유연성을 향상시키고 수익성 있는 성장 기회에 집중할 수 있게 한다고 강조했습니다.

Kingstone Companies, Inc. (NASDAQ:KINS) a annoncé une importante initiative de restructuration de la dette. L'entreprise a conclu un nouvel Accord d'Échange de Billets avec les détenteurs existants pour refinancer 19,95 millions de dollars de Billets Senior à 12% arrivant à échéance le 30 décembre 2024. En vertu du nouvel accord, Kingstone émettra 14,95 millions de dollars en nouveaux Billets Senior à 13,75% arrivant à échéance le 30 juin 2026, ainsi que 5 millions de dollars en espèces. Cette opération réduit effectivement la dette de l'entreprise de 25% et prolonge la date d'échéance de 18 mois. De plus, la date d'expiration des bons émis en 2022 sera prolongée jusqu'au 30 juin 2026. L'échange devrait se clôturer le 12 septembre 2024. Le PDG Meryl Golden a souligné que ce refinancement améliorera la flexibilité financière et permettra de se concentrer sur des opportunités de croissance rentables.

Kingstone Companies, Inc. (NASDAQ:KINS) hat eine bedeutende Initiative zur Umstrukturierung der Schulden angekündigt. Das Unternehmen hat eine neue Note-Tauschvereinbarung mit bestehenden Gläubigern getroffen, um 19,95 Millionen Dollar der ausstehenden 12% Senior Notes, die am 30. Dezember 2024 fällig sind, neu zu finanzieren. Im Rahmen der neuen Vereinbarung wird Kingstone 14,95 Millionen Dollar in neuen 13,75% Senior Notes mit Fälligkeit am 30. Juni 2026 ausgeben, zusätzlich zu 5 Millionen Dollar in bar. Dieser Schritt reduziert die Schulden des Unternehmens um 25% und verlängert das Fälligkeitsdatum um 18 Monate. Darüber hinaus wird das Ablaufdatum für 2022 ausgegebene Warrants bis zum 30. Juni 2026 verlängert. Der Tausch wird am 12. September 2024 abgeschlossen. CEO Meryl Golden betonte, dass diese Refinanzierung die finanzielle Flexibilität erhöhen und die Konzentration auf profitable Wachstumschancen ermöglichen wird.

Positive
  • Debt reduced by 25% from $19.95 million to $14.95 million
  • Debt maturity extended by 18 months to June 30, 2026
  • New debt structure allows for principal repayment without premium or penalty
  • Improved financial flexibility for focusing on profitable growth opportunities
Negative
  • Interest rate on new notes increased from 12% to 13.75%
  • $5 million cash payment required as part of the debt restructuring

Insights

This debt refinancing deal marks a significant improvement in Kingstone's financial position. The 25% reduction in debt principal from $19.95 million to $14.95 million is a positive step towards deleveraging. However, the increased interest rate from 12% to 13.75% could partially offset these savings. The extended maturity to June 2026 provides Kingstone with more breathing room, enhancing financial flexibility. The self-amortizing structure allows for gradual debt reduction, which could improve the company's credit profile over time. While the $5 million cash payment might impact short-term liquidity, the overall deal seems beneficial for Kingstone's long-term financial health. Investors should monitor how effectively management utilizes this improved financial position to drive growth and profitability.

This refinancing deal reflects positively on Kingstone's strategic financial management in a challenging insurance market. As a regional property and casualty insurer, Kingstone faces unique challenges, including potential catastrophic events in the Northeast. The debt reduction and extended maturity could provide a important buffer against unforeseen circumstances. The ability to repay principal without penalties is particularly advantageous in the cyclical insurance industry, allowing Kingstone to adjust its debt levels in response to market conditions. However, the higher interest rate might pressure underwriting margins, requiring careful balance between growth and profitability. The management's focus on "profitable growth opportunities" suggests a prudent approach, which is essential in the current competitive insurance landscape.

Kingstone's debt restructuring could be viewed favorably by the market, potentially improving investor sentiment. The 25% debt reduction and extended maturity demonstrate proactive financial management, which is important for smaller, regional insurers. The warrant extension to 2026 aligns investor interests with long-term company performance. However, the increased interest rate might raise concerns about higher financing costs. Investors should closely monitor Kingstone's ability to translate this financial flexibility into tangible growth and improved operational efficiency. The stock's performance post-announcement will be a key indicator of market reception. Given the challenges in the property and casualty insurance sector, Kingstone's ability to capitalize on this financial restructuring will be critical for its competitive positioning and market valuation.

KINGSTON, NY / ACCESSWIRE / September 3, 2024 / Kingstone Companies, Inc. (NASDAQ:KINS) (the "Company" or "Kingstone"), a Northeast regional property and casualty insurance holding company, announced today that it has entered into a new Note Exchange Agreement (the "Exchange Agreement") with its existing noteholders to refinance its outstanding 12% Senior Notes in the aggregate principal amount of $19.95 million due on December 30, 2024 (the "Existing Notes").

Pursuant to the Exchange Agreement, Kingstone will issue to the noteholders, in exchange for their Existing Notes, new 13.75% Senior Notes due June 30, 2026, in the aggregate principal amount of $14.95 million along with cash totaling $5 million. In addition, the expiration date for the warrants issued in 2022 at the time of the issuance of the Existing Notes will be extended to June 30, 2026. The exchange is scheduled to close on Thursday, September 12, 2024.

"We are pleased to have entered into this debt refinancing agreement," said Meryl Golden, Kingstone's Chief Executive Officer. "The new debt structure is self-amortizing and allows us to repay the principal without a premium or penalty. Our intent is to reduce the amount of the debt and the corresponding interest expense, as quickly as our operating results will allow, to drive enhanced value for our stockholders. This refinancing will enable us to heighten our focus on successfully executing the profitable growth opportunities currently underway. We look forward to utilizing Kingstone's enhanced financial flexibility to the benefit of all stakeholders."

About Kingstone Companies, Inc.

Kingstone is a northeast regional property and casualty insurance holding company whose principal operating subsidiary is Kingstone Insurance Company ("KICO"). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2023 was the 15th largest writer of homeowners insurance in New York. KICO is also licensed in New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine.

Forward-Looking Statements

Statements in this press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those included in forward-looking statements due to a variety of factors. For more details on factors that could affect expectations, see Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission.

Kingstone undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contact:

Karin Daly
Vice President
The Equity Group Inc.
kdaly@equityny.com

SOURCE: Kingstone Companies, Inc.



View the original press release on accesswire.com

FAQ

What is the new debt amount for Kingstone Companies (KINS) after the refinancing?

After the refinancing, Kingstone Companies (KINS) will have a new debt amount of $14.95 million in 13.75% Senior Notes.

When is the new maturity date for Kingstone's (KINS) refinanced debt?

The new maturity date for Kingstone's (KINS) refinanced debt is June 30, 2026.

How much did Kingstone Companies (KINS) reduce its debt in the September 2024 refinancing?

Kingstone Companies (KINS) reduced its debt by 25%, from $19.95 million to $14.95 million, in the September 2024 refinancing.

What is the new interest rate on Kingstone's (KINS) refinanced notes?

The new interest rate on Kingstone's (KINS) refinanced notes is 13.75%.

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