Legal & General America is the company behind the next "Triple X" securitization - one of several life insurance deals slated for this year.

The senior unsecured notes, likely to be in the $100 million range, are expected to have a triple-A rating, due to a wrap. The closing is anticipated by the end of the month.

It will be the third deal of its kind, and the structure is said to be very similar to the previous two deals, which both came from First Colony Life Insurance Co. Like the earlier deals, this one will be issued as a 144A.

Lehman Brothers, which also worked on the First Colony deals, is said to be the banker.

Legal & General should be joined by more first-time issuers over the next few months. Sources said other insurance companies - eager to free up capital - are planning deals of their own. Although the preparation time is lengthy, several are expected to hit the market in the second half of the year.

A relatively new regulation, Triple X requires insurance companies to hold a higher level of reserves for term life products - often as much as eight times more than is actually at risk.

A recent Standard & Poor's report estimates the Triple X reserves could be a $100 billion problem for the insurance industry within just a few years, with many companies facing serious capital strain.

In their search for a solution, more companies are looking to structured finance alternatives to fund the redundant reserves, the S&P report said.

Both First Colony and Legal & General are big players in term life.

The two First Colony securitizations, one last summer and one in December, were worth $300 million each. More from First Colony is said to be on the way: Eventually a total of up to $1.15 billion is expected to be issued through River Lake, a special purpose company that First Colony set up in South Carolina.

But the timing of the next piece is uncertain. First Colony, formerly part of GE Financial, has been distracted lately. Corporate parent General Electric Inc. spun off much of its GE Financial subsidiary in May, creating Genworth Financial to house its life and mortgage businesses.

Legal & General, based in Rockville, Md., operates Banner Life Insurance Co. and William Penn Life Insurance Co. of New York. It is part of London-based Legal & General Group plc, which is one of the world's largest life insurance companies.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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