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BF&M Limited Announces Rights Offering

BF&M Limited
Hamilton, Bermuda
22 May, 2006

BF&M Limited (the “Company”) today announces the upcoming launch of a Rights Offering to raise approximately BD$22.5 million of new capital. It was just one month ago that the Company reported 2005 record profits of BD$16.8 million. John Wight, President & Chief Executive Officer of BF&M Limited, stated,

“This Rights Offering is a key element of our strategic plan for growth and we feel that our shareholders will be sufficiently encouraged by our positive financial results to exercise their rights. The Offering will provide an opportunity for our shareholders to purchase additional shares at a significant discount to the current market value. The capital raised will be used to finance BF&M’s expansion strategy, in particular the growth of its wholly owned subsidiary, Bermuda International Insurance Services Limited, a company formed to market and distribute life insurance products to high net worth clients globally. This capital will also provide BF&M with the ability to act on future expansion opportunities as they arise.”

The Company will issue to eligible shareholders with a Bermuda address on record in the register of members as of Tuesday, May 30, 2006 (the "Record Date") one transferable right for every four shares of common stock held. Each right will entitle the holder to purchase one new share of common stock at the subscription price of BD$15.15 per share. This represents a substantial discount from BD$18.75, the last traded price of the Company’s shares on the Bermuda Stock Exchange as of Friday, May 19, 2006. In order to be eligible to participate in the Offering, a shareholder must have a Bermuda address on record in the register of members as of Tuesday, May 30, 2006; shareholders with addresses outside of Bermuda will not be eligible to participate in the Offering.

Eligible shareholders who fully exercise all rights issued to them will be entitled to subscribe for additional shares at the subscription price, pursuant to an oversubscription privilege. The Company will issue 1,473,826 new shares of its common stock in the Offering.

The subscription rights will be exercisable from Tuesday, June 6, 2006 (the “Effective Date”) until 4:00 p.m. Bermuda time on Friday, July 7, 2006 (the “Closing Date”). Rights may be transferred to any person with a Bermuda address or bought or sold via private arrangement. In addition, an application will be made to have the rights listed and traded on the Bermuda Stock Exchange (“BSX”). It is anticipated that the rights will be available for trading on the BSX between Monday, June 19, 2006 at 9:00 am and Friday, June 30, 2006 at 3:30 pm.

The Offering is underwritten by The Bank of Bermuda Limited.

ABOUT BF&M INSURANCE GROUP
BF&M Limited is the holding company of the BF&M Insurance Group. The two largest operating companies within the Group are BF&M Life Insurance Company Limited, a leading provider of life, health and pensions products, and BF&M General Insurance Company Limited, the leading general insurer providing all forms of property, casualty, motor and marine products. The group includes several other companies including BF&M Investment Services, Marchmont Insurance Company Limited, Bermuda International Insurance Company Limited, Hamilton Financial Limited, and BF&M Properties Limited, (including Scarborough Property Holdings Limited and Barr’s Bay Properties Limited)

For further information contact :-

R. John Wight C.A., President & Chief Executive Officer

Phone 295-5566 Fax 292-8831 e-mail jwight@bfm.bm

 
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