Kingstone refinances debt with new senior notes

KINGSTON, NY - Kingstone Companies, Inc. (NASDAQ:KINS), a Northeast regional property and casualty insurance holding company, has announced the refinancing of its outstanding senior notes due at the end of December 2024. The company will issue new 13.75% Senior Notes due June 30, 2026, with a principal amount of $14.95 million and will pay $5 million in cash to its noteholders. This transaction is set to close on Thursday, September 12, 2024.

The existing 12% Senior Notes, which have an aggregate principal amount of $19.95 million, will be exchanged for the new notes. Additionally, the expiration date for the warrants issued in 2022 will be extended to match the due date of the new notes.

Meryl Golden, CEO of Kingstone, expressed satisfaction with the new debt restructuring, noting that it is self-amortizing and allows the company to repay the principal without incurring any premiums or penalties. Golden emphasized the company's strategy to reduce debt and interest expenses to enhance stockholder value and focus on profitable growth opportunities. The refinancing is expected to provide Kingstone with increased financial flexibility to benefit all stakeholders.

Kingstone's principal operating subsidiary, Kingstone Insurance Company (KICO), is a New York domiciled carrier that writes personal lines and commercial auto insurance in New York, where it ranks as the 15th largest writer of homeowners insurance. KICO also holds licenses in several other states in the Northeast.

The press release includes forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those projected. Kingstone has stated that it will not update these forward-looking statements except as required by law.

This news article is based on a press release statement from Kingstone Companies, Inc.

In other recent news, Kingstone Company has reported a record-breaking third consecutive profitable quarter in Q2 2024, marking its most profitable quarter in seven years. This financial success was largely due to the acquisition of over 60,000 policies following the exit of two large competitors from the New York State market. In addition to this, Kingstone's strategic focus on profitable policy writing and growth in lucrative segments has resulted in a significant increase in net investment income and a robust return on equity of 47%.

The company's earnings per share reached $0.41, and it is currently finalizing a solution for its maturing debt, with plans to announce it within the next month. Despite these positive developments, it's important to note that the company is not on track to reach its expense ratio target of 29% for the year.

Kingstone is showing signs of continued growth, with a projected direct premium written growth of 25-35% in 2024 and 15-25% in 2025. The company also managed to capitalize on market opportunities by raising premiums and updating replacement costs on policy renewals. These recent developments indicate that Kingstone is poised for future success, as long as it continues to leverage market opportunities and maintain its focus on profitable policy writing.

InvestingPro Insights

In light of Kingstone Companies, Inc.'s recent announcement regarding the refinancing of its senior notes, a closer look at the company's financial metrics and market performance provides additional context for investors. According to InvestingPro data, Kingstone has a market capitalization of approximately $96.48 million, reflecting the market's valuation of the company. The company's P/E ratio stands at 17.6, indicating how much investors are willing to pay for a dollar of earnings, which is a key metric when evaluating the company's stock relative to near-term earnings growth.

InvestingPro Tips suggest that Kingstone is expected to see net income growth this year, which could be a promising sign for investors looking for profitability. Additionally, the company is trading at a low P/E ratio relative to this anticipated earnings growth. These insights, along with a strong return over the last year, could be seen as indicators of potential value for investors considering Kingstone's stock.

However, it's important to note that Kingstone's stock generally trades with high price volatility, which could affect investment decisions depending on an investor's risk tolerance. For those interested in exploring further, there are 11 additional InvestingPro Tips available for Kingstone Companies, Inc., offering deeper insights into the company's financial health and market performance (https://www.investing.com/pro/KINS).

With a strong return over the past month and three months, and a significant price uptick over the last six months, Kingstone's market performance seems to reflect a positive trend. While the company does not pay a dividend, which may influence the investment strategy of income-focused shareholders, the overall return metrics may appeal to growth-oriented investors.

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