Bermuda-based insurers Lancashire Insurance Company has entered into a US$200mn bilateral two year letter of credit (LC) facility with Lloyds TSB.

The LCs will be used to support obligations under the company’s reinsurance liabilities.

The facility was arranged by Lloyds TSB as sole lead arranger and sole book manager, with the bank also acting as the administrative agent and LC administrator.

Denise O’Donoghue, corporate finance officer at Lancashire, says: “We are very pleased to have the support of Lloyds TSB, a leading financial institution, for the Lancashire group. This facility boosts the long-term financial flexibility and strength we have committed to our clients.”

Richard Askey, Lloyds TSB corporate markets, adds: “We are delighted to work with Lancashire on this transaction and provide a financing structure to support the group. We very much look forward to building on this relationship with them going forward.”