Bermuda insurance company BF&M has announced it will exercise an option to convert its preferred shares to common shares.

The preferred shares affected are all outstanding 9 percent Convertible Cumulative Redeemable Preference Shares.

BF&M president and CEO Glenn Titterton said that BF&M Limited issued the Preference Shares in 1991 and that for the past ten years they had provided a sound investment opportunity for the community with a high rate of return.

He added that there were 2,492,000 Preference Shares currently issued and which would now be converted in accordance with the bye-laws of the Company, as reproduced in the Prospectus for the Preference Shares from September 1991.

Mr. Titterton said that while the intention in 1991 was that conversion would be on a one for one basis, two subsequent one for ten Common Share stock dividends mean that the holders of Preference Shares now receive 1.21 Common Shares in the Company for each Preference Share held.

Mr. Titterton added that, without any further changes, the conversion of the Preference Shares would benefit the company because the level of dividends payable would be reduced, thus further strengthening Shareholders Equity over a period. Mr. Titterton continued: "It is interesting to review this development with reference to recent trading in the company's shares on the Bermuda Stock Exchange (BSX).

"Over the past month Preference Shares have traded in a range between $12.75 and $13.25. For each such Preference Share a holder will receive 1.21 Common Shares, which have traded between $11.00 and $12.50 over the same period.

"As an example a holder of 100 Preference Shares with a market value over the past month of between $1,275 and $1,325 will receive 121 Common Shares with a market value over the same period of $1,331 to $1,512.50."