Palomar Holdings Finalizes Gray Surety Acquisition and Secures $450M Credit Facility

The acquisition and new unsecured credit enhance Palomar’s financial flexibility and expansion capacity in specialty insurance.

The setup

Palomar Holdings completed the acquisition of The Gray Casualty & Surety Company on January 31, 2026, coinciding with closing a $450 million unsecured credit facility. The financing includes a $150 million revolving line and a $300 million term loan led by U.S. Bank and KeyBank, providing liquidity to integrate Gray Surety and support growth initiatives.

The signal

This capital structure improvement alongside the acquisition reflects Palomar’s strategic intent to expand its specialty insurance footprint. The unsecured facility diversifies funding sources, avoids collateral encumbrances, and may lower financing costs while increasing operational flexibility.

Scenario tree

Three potential outcomes include: successful integration boosting underwriting results and premium growth; operational challenges limiting synergy capture and delaying benefits; or market conditions affecting refinancing or debt costs despite the unsecured facility.

What to watch next

Key milestones to watch are the integration timeline and effectiveness, credit facility utilization and covenant compliance, underwriting performance post-acquisition, and any updates on capital allocation or refinancing plans in upcoming earnings releases.

Key numbers

• $450 million total unsecured credit facility
• $150 million revolving credit line
• $300 million term loan
• Acquisition effective January 31, 2026
• Credit facility closed January 27, 2026

Key takeaways

• Acquisition and financing occurred within days, indicating coordinated execution
• Unsecured credit facility differs from typical asset-backed lending in insurance
• Multiple major banks participate in financing syndicate, reflecting confidence in Palomar's credit standing
• No detailed financial terms or expected contribution from Gray Surety disclosed

Sources

• Press release

This article is general in nature and often relies heavily on company press releases and other third-party public sources, which may be promotional, incomplete, or occasionally inaccurate. It also incorporates AI-generated analysis, assumptions, scenarios, and broader public background context to help place the news in a wider industry narrative. As a result, it may contain errors or omissions. Always verify important details using primary sources (company filings, official releases, and direct statements). This is not financial advice and is not a recommendation to buy or sell any security.

Disclaimer: Research-only. Not investment advice.