Cayman Islands holding company Stockton Holdings Ltd., the parent to Bermuda-based Stockton Reinsurance Ltd., has completed a private placement of some $173,500,000.

About two thirds of it represents new primary capital for Stockton Re and one third represents the secondary sale of shares from shareholders who have been involved with the company for almost 30 years.

Upon completion of the private placement, it was expected that the shareholders' equity would increase by some $113 million.

Some of the founding members in a bid to create liquidity, are cashing out.

They would have been with the company since it began as Commodities Corporation, a New Jersey asset management company, and long before the insurance and reinsurance arm was established in 1994.

It also provides an opportunity to bring in other investors with more insurance expertise.

The placement was made primarily to private and publicly traded institutional investors, which included Conning Insurance Capital Limited Partnership V, L.P., Prudential Corporation Plc, and Risk Capital Reinsurance Company.

Stockton Re president and CEO, Daniel Malloy, noted, "Active management and most of the significant shareholders either did not sell, or opted to take an increased share. Prudential was an existing shareholder and took an additional stake.

"Conning and Risk Capital Re bring with them a whole network of relationships. We are committed to being a Bermuda-based company. Getting our message across and developing contacts with people is a lot easier when you have shareholders of the stature and level connections that our shareholders have.

"It is an exciting time for us.'' The increased capital will better position Stockton Re in an increasingly competitive insurance and reinsurance landscape. And the market can expect Stockton Re to assume a higher profile in the industry.

Chairman of Stockton Holdings Ltd. Robert G. Easton commented: "We are pleased with the quality of this addition to our investor base, which now includes institutional investors with significant insurance and reinsurance expertise.

"The proceeds will serve to strengthen our capital base and support the growth of Stockton Re's reinsurance business and its underwriting capacity.'' Mr. Malloy said, "In terms of discussions with clients, the larger capital base clearly puts us into a league with more sizeable reinsurers.

"We're also in the process of recruiting additional staff to ensure that we have the professional capabilities. We are looking to ultimately position ourselves as the independent insurer or reinsurer of choice to our larger customers.'' Arrangements for the offering were led by Goldman Sachs & Co. with Credit Suisse First Boston Corporation acting as additional placement agent.

Stockton Holdings Ltd. declared net income of $65,279,000 for the year to March 31, and shareholders' equity of $477,927,000 in audited financial statements.

Stockton Holdings Limited's principal operating subsidiary, Stockton Reinsurance Ltd., is an insurer and reinsurer of specialty risks, including both traditional and finite risk products.

Although headquartered in Bermuda, Stockton Re has a representative office in London.