private offering to capitalise a surplus lines carrier in the US, the Bermuda-based company said Friday.

Capital generated by the private offering, up to $100 million in debentures, will be used to buy an existing insurance company or set up a new company.

A portion of the proceeds will go to general corporate purposes, MRM said.

Surplus lines are specialised types of coverage provided by a nonadmitted insurer in instances where that coverage is unavailable from insurers already licensed in a given US state.

The offering, if oversubscribed, could generate an additional $15 million. The debenture sales, to certain qualified investors and overseas persons commenced on Friday, MRM said.

The offering consists of zero coupon convertible exchangeable subordinated debentures due in 2015 plus, if oversubscribed, additional debentures.

The debentures will be convertible into shares of MRM common stock.

The transaction is expected to close before the end of October, the company said.

The debentures have not yet been registered under the US Securities Act 1933 and may not be offered or sold within the US absent registration or an available exemption from such registration requirements.