8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 30, 2008

Allied World Assurance Company Holdings, Ltd
__________________________________________
(Exact name of registrant as specified in its charter)

Bermuda	001-32938	98-0481737
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
27 Richmond Road, Pembroke, Bermuda,		HM 08
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 441-278-5400

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On December 30, 2008, Allied World Assurance Company, Ltd ("Allied World"), a subsidiary of Allied World Assurance Company Holdings, Ltd (the "Company"), amended its existing collateralized letter of credit facility, dated March 5, 2007, with Citibank Europe plc ("CEP") to provide Allied World with greater flexibility by expanding the types of securities that are eligible to be posted as collateral thereunder (the "Amended LOC Facility"). CEP has also increased the maximum aggregate amount available under the facility from $750 million to $900 million on an uncommitted basis.

In order to effectuate the expansion of eligible securities under the Amended LOC Facility, on December 30, 2008, Allied World, CEP and The Bank of New York Mellon (formerly Mellon Bank, N.A.) ("BNY Mellon") entered into a letter agreement (the "Letter Agreement") that amended: (i) Schedule 1 to the Pledge Agreement, dated as of February 28, 2007 (the "Pledge Agreement"), by and between Allied World and CEP; and (ii) Exhibit A t o the Account Control Agreement, dated March 5, 2007 (the "Account Control Agreement"), by and among CEP (as secured party), Allied World (as pledgor) and BNY Mellon. Pursuant to the Letter Agreement, certain securities issued by the U.S. Government or its agencies (fully guaranteed) or the central government of an OECD country, in each case rated AA or AA equivalent or better, may be posted as collateral under the Amended LOC Facility. In addition, securities of other institutions that are fully guaranteed by the U.S. Government or the central government of an OECD country and which are rated AA or AA equivalent or better may be deemed eligible by CEP at its sole discretion and posted as collateral by Allied World. All other terms of the Pledge Agreement and the Account Control Agreement, as previously filed by the Company with the Securities and Exchange Commission in a Current Report on Form 8-K on March 6, 2007, remain in full force and effect.

The Letter Agreement is attached hereto as Exhib it 10.1 and is incorporated herein by reference. The description of the Letter Agreement contained herein is qualified in its entirety by reference to the Letter Agreement filed herewith.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained above under "Item 1.01. Entry into a Material Definitive Agreement" is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Ex. No. - Description
-------- - ---------------------
10.1 - Letter Agreement, dated December 30, 2008, by and among Allied World Assurance Company, Ltd, Citibank Europe plc and The Bank of New York Mellon.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Allied World Assurance Company Holdings, Ltd
January 5, 2009	By:	/s/ Wesley D. Dupont
		Name: Wesley D. Dupont
		Title: Senior Vice President and General Counsel

Exhibit Index

Exhibit No.	Description
10.1	Letter Agreement, dated December 30, 2008, by and among Allied World Assurance Company, Ltd, Citibank Europe plc and The Bank of New York Mellon.

EX-10.1

Peadar Mac Canna	Citigroup
Director	1 North Wall Quay
Trade Business Management	Dublin 1, Ireland
	Tel +353 (1) 622 4567
	Fax +353 (1) 622 2741
	peadar.maccanna@citi.com

Allied World Assurance Company, Ltd (“Allied World”)
27 Richmond Road
Pembroke HM08
Bermuda
Attention: Joan H. Dillard

The Bank of New York Mellon (“BNY Mellon”)
One Mellon Center
Pittsburgh
PA 15258
USA
Attention: Erin Potter

Date: 30 December 2008

Dear Sirs

Reference is hereby made to (i) the Pledge Agreement by and among (1) Allied World and (2) Citibank Europe Plc dated 28 February 2007 (the “Pledge Agreement”) and (ii) the Account Control Agreement by and among (1) Allied World (2) BNY Mellon and (3) Citibank Europe Plc dated 5 March 2007 (the “Account Control Agreement”).

With reference to the Pledge Agreement, Schedule 1 to the Pledge Agreement shall be deleted in its entirety and replaced by the Annex to this Letter.

With reference to the Account Control Agreement, Exhibit A to the Account Control Agreement shall be deleted in its entirety and replaced by the Annex to this Letter.

Save as expressly provided in this Letter, the provisions of the Pledge Agreement and the Account Control Agreement shall remain in full force and effect. Each party represents and warrants to the other parties hereto that this Letter constitutes its legally binding obligation, enforceable in accordance with its terms. This Letter shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflict of laws.

Please countersign and return this letter, which may be in any number of counterparts (including facsimile counterparts) and which shall be effective as of the date hereof.

Yours faithfully,

FOR CITIBANK EUROPE PLC

By: /s/ Mary O’Neill
Name: Mary O’Neill
Title: Vice President





We hereby confirm our agreement to the above.

ALLIED WORLD ASSURANCE COMPANY, LTD
By: /s/ Joan H. Dillard	By: /s/ Marchelle Lewis
Name: Joan H. Dillard Title: Chief Financial Officer	Name: Marchelle Lewis Title: V.P. & Treasurer

We hereby confirm our agreement to the above.

THE BANK OF NEW YORK MELLON

By: /s/ Donna F. Moses
Name: Donna F. Moses
Title: First Vice President

ANNEX

AMENDED SCHEDULE 1 to the PLEDGE AGREEMENT
AMENDED EXHIBIT A to the ACCOUNT CONTROL AGREEMENT

Securities or Other Assets acceptable as Financial Assets

	Bank’s Requirements
Description of component part of Charged Portfolio	Issuer	Rating
Government Securities	US Government or the central government of an OECD (Organisation for Economic Co-operation and Development) country	AA or AA equivalent or better
	(1) Negotiable debt obligations and/or (2) mortgage-backed securities issued by the following:
US Government Agency Securities	The Federal Home Loan Mortgage Corporation or any successor thereto; The Federal National Mortgage Association or any successor thereto; The Government National Mortgage Association or any successor thereto; The Federal Farm Credit Banks Funding Corporation or any successor thereto; and/or The Federal Home Loan Banks or any successor thereto; BUT excluding interest only or principal only stripped securities, securities representing residual interests in mortgage pools, or securities that are not listed on a national securities exchange or regularly quoted in a national quotation service).	AA or AA equivalent or better
	Eligible Institutions whose debt obligations are fully and explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the US or an OECD Government. PROVIDED THAT:
Guaranteed Securities	Each Guaranteed Security will only be treated as acceptable by the Bank for inclusion if it is considered eligible in the Bank’s sole judgment.	AA or AA equivalent or better