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 19, 2006

HCC INSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 001-13790
(Commission File
Number) 76-0336636
(IRS Employer
Identification No.)

13403 Northwest Freeway
Houston, Texas
(Address of principal executive offices)  
77040-6094
(Zip Code)

Registrant’s telephone number, including area code: (713) 690-7300

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 (see General Instruction A.2. below):

     o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o  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 19, 2006, HCC Insurance Holdings, Inc. entered into a First Amendment to its $200 Million Revolving Loan Facility dated (the “Amendment”) with Wells Fargo Bank (Texas), National Association, Citibank, N.A., Wachovia Bank, National Association, Royal Bank of Scotland, Amegy Bank National Association and The Bank of New York (collectively, the “Lenders”).

     The Amendment increases the amount available for borrowing under the Revolving Loan Facility by $100 million, bringing the total facility to $300 million. Under the terms of the Amendment, HCC can borrow up to $25 million in addition to what is currently borrowed under the facility for working capital purposes until such time as HCC is current in its periodic reports to the SEC, after which time this restriction lapses. However, the full amount of the facility would be available to pay any potential convertible note conversion or put.

Also included in the Amendment are waivers by the Lenders

• of the requirement for the delivery of our quarterly financial statements for the second quarter of 2006 through January 31, 2007;

• of the requirement for the delivery of our quarterly financial statements for the third quarter of 2006 through January 31, 2007; and

• of any “Event of Default” under the revolving credit facility arising solely by reason of

• a cross default caused by an event of default under the indentures for our convertible debt caused by our failure to deliver our quarterly financial statements for the second and third quarters of 2006; or

• any acceleration of the indebtedness under such indentures, or the put or conversion of such indebtedness, arising solely by reason of such an event of default under the indentures.

     All other material terms remain unchanged.

     A copy of the Amendment is filed herewith as an exhibit.

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

     The information provided in Item 1.01 is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

     The Company issued a press release dated December 19, 2006 announcing the amendment of its revolving credit facility.

     A copy of the press release filed by the Company is attached hereto as Exhibit 99.1 and incorporated herein by reference and is also available at HCC’s website at www.hcc.com.

     The information furnished under this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

No.	Exhibit
10.1	First Amendment to Loan Agreement entered into as of December 19, 2006 by and among HCC Insurance Holdings, Inc. and Wells Fargo Bank (Texas), National Association, Citibank, N.A., Wachovia Bank, National Association, Royal Bank of Scotland, Amegy Bank National Association and The Bank of New York
99.1	Press Release dated December 19, 2006

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.

	HCC INSURANCE HOLDINGS, INC.
Date: December 19, 2006	By:	/s/ Frank J. Bramanti
		Frank J. Bramanti,
		Chief Executive Officer

EXHIBITS INDEX

No.	Exhibit
10.1	First Amendment to Loan Agreement entered into as of December 19, 2006 by and among HCC Insurance Holdings, Inc. and Wells Fargo Bank (Texas), National Association, Citibank, N.A., Wachovia Bank, National Association, Royal Bank of Scotland, Amegy Bank National Association and The Bank of New York
99.1	Press Release dated December 19, 2006

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO LOAN AGREEMENT

     THIS FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is made and entered into as of December 19, 2006 by and among HCC INSURANCE HOLDINGS, INC., a Delaware corporation (the “Borrower”); each of the Lenders which is a party to the Loan Agreement (as defined below) (individually, a “Lender” and, collectively, the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, Administrative Agent for the Lenders and Lead Arranger (in such capacity, together with its successors in such capacity, the “Agent”).

RECITALS

     A. The Borrower, the Lenders and the Agent executed and delivered that certain Loan Agreement dated as of November 24, 2004. Said Loan Agreement, as heretofore amended, is herein called the “Loan Agreement”. Any capitalized term used in this Amendment and not otherwise defined shall have the meaning ascribed to it in the Loan Agreement.

     B. The Borrower, the Lenders and the Agent desire to amend the Loan Agreement in certain respects.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations and warranties herein set forth, and further good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the Agent do hereby agree as follows:

     SECTION 1. Amendments to Loan Agreement.

     (a) The reference to $200,000,000” set forth in Section 2.1(b) of the Loan Agreement is hereby amended to read “$300,000,000”.

     (b) Schedule I to the Loan Agreement is hereby amended to be identical to Schedule I attached hereto.

     SECTION 2. Waivers; Additional Restrictions During Waiver Period.

     (a) The Lenders hereby waive the requirement for the delivery of the Quarterly Financial Statements of Borrower for the second quarter of 2006 (and the related Compliance Certificate) within 60 days after the end of such fiscal quarter; provided, however, that such Quarterly Financial Statements (and the related Compliance Certificate) must be delivered to Agent on or before earlier of (i) January 31, 2007 or (ii) five (5) business days following Borrower’s filing of its Quarterly Report on Form 10Q for the period ending June 30, 2006, and the failure to do so shall constitute an Event of Default.

     (b) The Lenders hereby waive the requirement for the delivery of the Quarterly Financial Statements of Borrower for the third quarter of 2006 (and the related Compliance Certificate) within 60 days after the end of such fiscal quarter; provided, however, that such Quarterly Financial Statements (and the related Compliance Certificate) must be delivered to

Agent on or before earlier of (i) January 31, 2007 or (ii) five (5) business days following Borrower’s filing of its Quarterly Report on Form 10Q for the period ending September 30, 2006, and the failure to do so shall constitute an Event of Default.

     (c) The Lenders hereby waive any Event of Default arising solely by reason of (x) the occurrence of an “Event of Default” under the Indentures (hereinafter defined) attributable solely to the failure to deliver (i) the Quarterly Financial Statements of Borrower for the second quarter of 2006 or (ii) the Quarterly Financial Statements of Borrower for the third quarter of 2006, to the applicable trustee under the Indentures or (y) any acceleration of the indebtedness of Borrower under the Indentures, or the put or conversion of such indebtedness of Borrower under the Indentures, arising solely by reason of such an “Event of Default” under the Indentures. The term “Indentures” as used herein means the indentures governing Borrower’s 1.30% Convertible Notes due 2023 or 2.00% Convertible Exchange Notes due 2021.

     (d) Until such time as the Borrower shall have delivered to the Administrative Agent the Quarterly Financial Statements of Borrower for the second and third quarters of 2006 (and the related Compliance Certificates), (i) the proceeds of the Loans shall be used only for working capital needs not exceeding, in the aggregate after the date hereof, $25,000,000 and for liquidity necessary for a potential convertible note conversion or put (and without limiting the foregoing, Loan proceeds shall not be used for acquisitions or investments) and (ii) the Borrower will not, and will not suffer or permit any of its Subsidiaries to, create, incur, suffer or permit to exist, or assume or guarantee, directly or indirectly, or become or remain liable with respect to any Borrowed Money Indebtedness other than Borrowed Money Indebtedness permitted under Sections 8.1(i) (excluding Indebtedness secured by Liens permitted by Section 8.2), (ii) and (iii) of the Loan Agreement and permitted Borrowed Money Indebtedness outstanding as of the date of this Amendment.

     SECTION 3. Conditions. This Amendment shall not become effective until (a) the Administrative Agent (or its counsel) has received from the Borrower and all of the Lenders either (1) a counterpart of this Amendment signed on behalf of such party or (2) written evidence satisfactory to the Administrative Agent (which may include telecopy or e-mail transmission of a signed signature page of this Amendment) that such party has signed counterparts of this Amendment, and (b) the Borrower has executed and delivered to the Administrative Agent for each Lender a new Note in the maximum principal amount of such Lender’s Commitment and substantially in the form of Exhibit C to the Loan Agreement. Lenders shall have no obligation to make any Loans after the effective date of this Amendment unless and until the Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower, the authorization of the execution, delivery and performance of this Amendment and the new Notes by the Borrower and any other legal matters relating to this Amendment. The Administrative Agent shall give, or cause to be given, prompt notice to the Borrower and the Lenders as to whether the conditions specified in the immediately preceding sentence have been satisfied by the deadline set forth therein; such notice may be oral, telephonic, written (including telecopied) or by e-mail.

     SECTION 4. Amendment Fee. No part of this Amendment shall become effective until the Borrower shall have delivered to the Agent payment to each Lender executing this Amendment on or prior to December 19, 2006 of a fee equal to the sum of (i) 0.05% of such

2

Lender’s Commitment prior to giving effect to this Amendment plus (ii) 0.10% of the increase of such Lender’s Commitment effected pursuant to this Amendment.

     SECTION 5. Ratification. Except as expressly amended by this Amendment, the Loan Agreement and the other Loan Documents shall remain in full force and effect. None of the rights, title and interests existing and to exist under the Loan Agreement are hereby released, diminished or impaired, and the Borrower hereby reaffirms all covenants, representations and warranties in the Loan Agreement (except such representations and warranties which are, by their express terms, limited to a prior date).

     SECTION 6. Expenses. The Borrower shall pay to the Agent all reasonable fees and expenses of its respective legal counsel (pursuant to Section 11.3 of the Loan Agreement) incurred in connection with the execution of this Amendment.

     SECTION 7. Certifications. The Borrower hereby certifies that after giving effect to this Amendment (a) no material adverse change in the assets, liabilities, financial condition, business or affairs of the Borrower has occurred since December 31, 2005 and (b) no uncured Default or uncured Event of Default has occurred and is continuing or will occur as a result of this Amendment.

     SECTION 8. Miscellaneous. This Amendment (a) shall be binding upon and inure to the benefit of the Borrower, the Lenders and the Agent and their respective successors, assigns, receivers and trustees; (b) may be modified or amended only by a writing signed by the required parties; (c) shall be governed by and construed in accordance with the laws of the State of Texas and the United States of America; (d) may be executed in several counterparts by the parties hereto on separate counterparts, and each counterpart, when so executed and delivered, shall constitute an original agreement, and all such separate counterparts shall constitute but one and the same agreement and (e) together with the other Loan Documents, embodies the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements, consents and understandings relating to such subject matter. The headings herein shall be accorded no significance in interpreting this Amendment.

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NOTICE PURSUANT TO TEX. BUS. & COMM. CODE §26.02

     THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have caused this Amendment to be signed by their respective duly authorized officers, effective as of the date first above written.

HCC INSURANCE HOLDINGS, INC., a Delaware corporation
By:	/s/ Edward H. Ellis, Jr.
	Name:	Edward H. Ellis, Jr.
	Title:	Executive Vice President & CFO

4

     The undersigned hereby join in this Amendment to evidence their consent to execution by Borrower of this Amendment, to confirm that each Loan Document now or previously executed by the undersigned applies and shall continue to apply to the Loan Agreement, as amended hereby, to acknowledge that without such consent and confirmation, Lenders would not execute this Amendment and to join in the notice pursuant to Tex. Bus. & Comm. Code §26.02 set forth above.

MARSHALL RATTNER, INC., a New York corporation, GREAT AMERICAN INDUSTRIES, INC., a Louisiana corporation, HCC BENEFITS CORPORATION, a Delaware corporation, ASU INTERNATIONAL, INC., a Massachusetts corporation, HCC RISK MANAGEMENT CORPORATION, a Texas corporation, PROFESSIONAL INDEMNITY AGENCY, INC., a New Jersey corporation, COVENANT UNDERWRITERS, LTD., a Louisiana corporation, CONTINENTAL UNDERWRITERS LTD., a Louisiana corporation, HCC GLOBAL FINANCIAL PRODUCTS, LLC, a Dela ware limited liability company
By:	/s/ Edward H. Ellis, Jr.
	Edward H. Ellis, Jr., Executive Vice President
HCC EMPLOYER SERVICES, INC., an Illinois corporation,
By:	/s/ Edward H. Ellis, Jr.
	Edward H. Ellis, Jr., Executive Vice President and Chief Financial Officer
SBS MERGER SUB, INC., a Delaware corporation, HCC INTERMEDIATE HOLDINGS, INC., a Delaware corporation, HCCS CORPORATION, a Delaware corporation, AVEMCO CORPORATION, a Delaware corporation, MAG ACQUISITION SUB, INC., a Delaware corporation, HCC EMPLOYEE BENEFITS, INC., a Delaware corporation
By:	/s/ Edward H. Ellis, Jr.
	Edward H. Ellis, Jr., President

5

ILLIUM, INC., a Delaware corporation
By:	/s/ Peter J. Winnington
	Peter J. Winnington,
	President and Treasurer

6

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and as a Lender
By:	/s/ Ben McCaslin
	Name:	Ben McCaslin
	Title:	Vice President

7

CITIBANK, N.A.
By:	/s/ Gregory Kroitzsh
	Name:	Gregory Kroitzsh
	Title:	Vice President

8

WACHOVIA BANK, NATIONAL ASSOCIATION
By:	/s/ Karen Hanke
	Name:	Karen Hanke
	Title:	Director

9

ROYAL BANK OF SCOTLAND
By:	/s/ Marie Fitzgerald
	Name:	Marie Fitzgerald
	Title:	Associate Relationship Director

10

AMEGY BANK NATIONAL ASSOCIATION
By:	/s/ Laif Afsetl
	Name:	Laif Afsetl
	Title:	Senior Vice President

11

BANK OF NEW YORK
By:	/s/ Michael Pensari
	Name:	Michael Pensari
	Title:	Vice President

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SCHEDULE I

COMMITMENTS

Wells Fargo Bank (Texas), National Association	$	75,000,000
Citibank, N.A.	$	75,000,000
Wachovia Bank, National Association	$	60,000,000
Royal Bank of Scotland	$	40,000,000
Amegy Bank National Association	$	35,000,000
The Bank of New York	$	15,000,000

1

EX-99.1

Exhibit 99.1

Press Release

HCC INCREASES ITS REVOLVING LOAN FACILITY

HOUSTON (December 19, 2006) . . .
HCC Insurance Holdings, Inc. (NYSE symbol: HCC) announced today that the Company had reached an agreement with a group of banks led by Wells Fargo to increase its revolving loan facility by $100 million, bringing the total facility to $300 million. The credit facility includes Wachovia Bank as syndication agent, Citibank, Royal Bank of Scotland, Amegy Bank and the Bank of New York.

Pursuant to the terms of the agreement, the Company can borrow up to $25 million in addition to what is currently borrowed for working capital purposes. However, the full unfunded amount of the facility would be available to pay any potential convertible note conversion or put. In addition the Company was granted certain waivers until January 31, 2007 relating to its failure to file quarterly financial reports.

Commenting on this change, Frank J. Bramanti, Chief Executive Officer, said, “This additional borrowing capacity coupled with our existing available cash gives us ample liquidity to respond to any potential issue arising from our convertible debt securities, including full payment if necessary.”

Headquartered in Houston, Texas, HCC is a leading international specialty insurance group with offices across the United States and in Bermuda, Spain and the United Kingdom. HCC has assets exceeding $7.5 billion, shareholders’ equity of almost $2.0 billion and is rated AA (Very Strong) by Standard & Poor’s and A+ (Superior) by A. M. Best Company.

For more information, visit our website at www.hcc.com.

Contact: L. Byron Way, Vice President
HCC Insurance Holdings, Inc.
Telephone: (713) 690-7300

Forward-looking statements contained in this press release are made under “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The types of risks and uncertainties which may affect the Company are set forth in its periodic reports filed with the Securities and Exchange Commission. In addition, the completion of the independent review of the Company’s option granting practices and any remedial decisions instituted by the Board of Directors might have a material affect on the risks and uncertainties of the Company’s future results.

* * * * *