UK INSURER RSA PLANNING RIGHTS ISSUE: REPORT

UK-based insurer RSA, formerly Royal & SunAlliance, is planning a rights issue and has appointed JP Morgan and Merrill Lynch to prepare the capital raising, according to a report at the weekend in the UK Sunday Telegraph. However, the final decision on whether to go ahead rests with the board, the report claimed. RSA announced recently that it would pay down €500m ($717m) in debt on October 15, earlier than required. Although both Chaucer and Catlin have raised cash from investors already this year, any cash call by RSA would dwarf the combined £253m that these two raised. Reports on the likely level of the cash call ranged from £600m to £1bn. RSA’s share price was down 5% this morning in early trade, in a falling market.