Corinthian Group, the specialty non-catastrophe focused collateralized P&C reinsurance firm, has told its partners that it has agreed to terms on an up to $200 million injection of capital from a large investor, to replace collateral linked to Vesttoo.Corinthian said that signatures on an agreed letter of intent are expected by next Monday at the latest and that the large investor has a verified source of funds, with up to $200 million expected to be available to replace collateral linked to letters of credit (LOCs), in a market update document seen by Artemis.If agreed, Corinthian said that it expects the capacity would be available to it “by the end of August or middle of September at the latest”, and prior to the important Q3 reporting deadline.The company said that the investor involved has “already reviewed extensive information regarding the Corinthian portfolio of companies and their respective programs.” As a result, it sees the interest from the investor in replacing the potentially fraudulent and invalid LOCs linked to Vesttoo as, “a considerable vote of confidence in Corinthian and its operations.” Corinthian said that it hopes this will provide some short and long term comfort to its trading partners, in particular as this letter of intent has been reached in a relatively short timeframe, since we’re still less than a fortnight since the fraudulent or forged letter of credit (LOC) crisis broke.

As we reported last week, .Because of this and the fact the investigation is ongoing, Corinthian has seen providing continuity to its clients and partners as the critical goal to achieve, with replacement of Vesttoo-linked LOC collateral its main target.In getting terms agreed on a letter of intent for investment to replace that collateral already, Corinthian will give confidence to its cedents and partners that it can ride out this issue, with the investigation still ongoing, while securing its obligations to cedents.

The company said that the capacity afforded by this letter of intent with the large investor will “provide the necessary foundation for other capacity infusion that will allow Corinthian and its partners a path to emerge from this unprecedented and unfortunate situation with the minimum harm possible.” “To that end, Corinthian has been successful in expanding capacity from its historical and new investors and is in advanced stages of evaluating other potential solutions,” Corinthian added.Corinthian noted that, “Remedying an alleged fraud of this magnitude and sophistication level is not an easy task.” But said it is, “Confident that the organization and its partners are going to emerge from this situation as soon as possible and in as favorable a position as possible under the circumstances.” July 31st – .July 28th – .

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