Bermuda-based Flagstone Reinsurance Holdings Ltd. has raised $136 million through a private sale of bonds.

The junior subordinated deferrable interest debentures have a floating rate of interest equal to three-month LIBOR plus 354 basis points, reset quarterly. The Deferrable Interest Debentures mature on September 15th, 2036, and may be called at par by the Company at any time after September 15th, 2011.

Flagstone Re was formed in 2005 in the wake of Hurricane Katrina by hedge fund company West End Capital when it raised an initial capitalisation of $715 million.