Bermuda-based insurer AXIS Capital has secured a $750 million credit facility from a syndicate of lenders, including the Bank of Bermuda.

The renewal agreement follows the company ? one of a wave of companies to set up in Bermuda after a void in re/insurance capacity following the September 11, 2001 terrorist attacks ? having previously had a $400 million credit agreement.

The newly brokered arrangement ? an unsecured three-year facility capped at $750 million ? allows AXIS to issue letters of credit and also gives the company leave to borrow up to $300 million for capitalisation or cash flow needs.

Bermuda-based reinsurers writing business for US companies often use this kind of arrangement when they are required to post security on behalf of clients, usually in the form of a letter of credit.

Although credit facilities are standard practice for reinsurers, AXIS Capital?s announcement signals the first major deal involving the Bank of Bermuda to be made public following its sale in February to multinational banking giant HSBC Plc.

In the run up to the sale ? which was first announced last October, but did not close until after shareholder approval was received on February 16 ? bank management predicted that under HSBC they would be able to do much more business with the Island?s international business sector.

At the time, then chief operations officer Philip Butterfield (who was later named CEO) said joining HSBC would change the bank?s capital profile and give it the financial standing to draw more business from the Island?s booming insurance industry.

?The Island?s international insurance and reinsurance sector, as an industry has well over $100 billion in assets yet less than four percent of those assets are domiciled in Bermuda banks ? whether with us and other banks on the Island.

?The reason (for that) is that the treasurers and CFOs of those companies choose to have a cap on the extent to which they will use local banks as depositories because of our capital position. It is a prudent choice,? he said.

Now that its sale to HSBC has closed the bank is seeing some of that business come in, as the AXIS deal attests.

This week AXIS Capital chief financial officer Andrew Cook told the company had involved the Bank of Bermuda in negotiations early on, being keen to deal with a local institution it was already familiar with ? and knowing that negotiations were being made with HSBC.

Although AXIS had done business with the bank previously, it was at a much lower level than this time around.

An amount was not put on the bank?s involvement, but it was said to be ?at the highest level? possible. Bank of Bermuda head of corporate banking William Welton said: ?This was the first test case. And we are very appreciative of the fact that AXIS gave us the opportunity, as a local institution, to give this a shot. This is the first time (now with the bank coming under HSBC) we are on a level playing field.?

Mr. Welton said that he and others as the local face of the Bank of Bermuda were there to make sure that executives - such as AXIS CEO John Charman and CFO Andrew Cook - had access to all of the resources of the HSBC network.

?This is a very exciting herald of future business in Bermuda,? he said. Meanwhile, Mr. Cook said AXIS had been impressed with the service it had got from the Bank and HSBC: ?The level of commitment goes all the way up from Philip (Butterfield) to (HSBC chairman) Sir John Bond.?

The bank ? a co-documentation agent in the deal ? is one of a consortium of banks involved with J.P. Morgan Securities Inc. acting as lead arranger and bookrunner, while Barclays Bank Plc. was syndication agent and Citibank, Bank of Bermuda/HSBC Bank USA, ING Bank and Wachovia Bank as co-documentation agents.

Meanwhile, AXIS Capital and another Bermuda peer, Endurance Specialty Holdings, are getting rave reviews from Forbes magazine as two companies on a shortlist of five for investors to keep an eye on.

Both companies, each set up in late 2001, this month made it on to the leading publication?s list of the top 2,000 global companies. But the accolades did not stop there, with Forbes saying both AXIS and Endurance were companies that analysts were expecting great things from.

Forbes said that AXIS, Endurance and two other firms ? Hon Hai Precision and MediaTek ? had stock trading for no more than 14 times its next 12-month estimated earnings per share, and that analysts predictions were that each would see an increase of at least 15 percent annually over the next three to five years.