Enstar Group Limited (ESGR) Q2 2023 Earnings Conference Call August 2, 2023 5:00 PM ET

Corporate Participants

Peter Kalaev - Group Treasurer

Dominic Silvester - CEO

Matthew Kirk - CFO

Transcript provided by the company.

Peter Kalaev

Hello everyone, I’m Peter Kalaev, Group Treasurer. Thank you for listening to Enstar’s Second Quarter 2023 Earnings Audio Review with CEO Dominic Silvester and CFO Matt Kirk.

Before we begin, I’d like to remind everyone that this presentation contains forward- looking statements and non-GAAP financial measures. Forward-looking statements in this presentation include, but are not limited to, statements about Enstar’s expectations for future and pending transactions, run-off liability earnings, the performance of its investment portfolio and the impact of rising interest rates on Enstar’s business. These statements are inherently subject to risks, uncertainties and assumptions that may cause actual results to differ materially from the statements being made as of the date of this update or in the future. Additional information regarding these statements and our non- GAAP financial measures is outlined in the text that appears below the link to this recording.

With that, I will turn it over to Dominic.

Dominic Silvester

Thank you, Peter. It was another solid quarter for Enstar as we continued to generate positive results, grow our portfolio, and strengthen our balance sheet, positioning us well for the second half of the year. A few notable highlights: We completed both our $2.0 billion-dollar LPT transaction with QBE, and our $179 million LPT transaction with RACQ Insurance Limited.

We generated strong net investment income of $172 million, largely driven by improved year-over-year performance in our investment portfolio, which was supported by the impact of rising interest rates on our floating rate assets and the investment of new assets from our transactions with QBE and RACQ at over 5% yields.

We refinanced and upsized our revolving credit agreement from $600 million to $800 million, and extended its term by five years through May 2028, thereby strengthening our balance sheet and further increasing our liquidity position. Our pipeline continues to be robust, and we remain disciplined in our search for appropriate opportunities that meet our internal hurdle for risk-adjusted returns.

Finally, we were pleased to receive an upgrade from S&P on our long-term issuer credit rating to BBB+, which comes on the heels of last year’s upgrade from Fitch. These actions by the rating agencies further validate the outstanding performance, leadership and strong capitalization which we’ve consistently demonstrated over time.