Bermuda-based Montpelier Re Holdings Ltd. on Friday announced it had secured a $450 million credit agreement for the next three years.

The agreement will enable Montpelier to issue letters of credit to its clients to support its underwriting.

The facility also incorporates a $50 million revolving line of credit for general corporate purposes.

Neil McConachie, treasurer of Montpelier, said: "We are extremely pleased to have closed this transaction with such a strong group of financial partners. We are particularly appreciative of the fact that all of our existing partners chose to renew their commitment to this facility for a further three years. This agreement secures significant liquidity and flexibility for Montpelier, in supporting our existing and anticipated client needs."

Banc of America Securities LLC and Banc One Capital Markets, Inc. acted as joint lead arrangers, with Barclays Bank Plc, ING Bank N.V. and HSBC Bank USA acting as co-documentation agents. Banc of America, N.A will act as administrative agent.

Montpelier announced last week that its board of directors approved the purchase of up to $150 million of its common stock over the next two years either through private transactions or on the open market depending on market conditions.

Montpelier chairman, president and CEO Anthony Taylor said the company's financial since it was founded had generated excess capital above the needs of its underlying portfolio.

"(We) have determined to return up to $150 million to our investors by way of share repurchases," he said.