Shareholders' Equity

As at September 30, 2013, the aggregate authorized share capital of the Company was 150,000,000 shares from which the Company has issued 73,575,384 common shares, of which 72,613,048 common shares are outstanding, and issued 6,000,000 preference shares with an additional 3,000,000 preference shares subscribed for but unissued. Furthermore, there is a further 300,000 preference shares authorized for issuance from the aggregate authorized share capital of the Company.

Mandatory Convertible Preference Shares - Series B

On September 25, 2013, the Company announced the pricing of a public offering of 3,000,000 7.25% Mandatory Convertible Preference Shares - Series B (the "Preference Shares - Series B"), at $50 per preference share, with an underwriting discount of $1.50 per preference share. In addition, the underwriters of the issuance received an over allotment option to purchase an additional 300,000 shares, which was exercised on October 1, 2013. The Preference Shares - Series B are not redeemable. The authorized number of the Preference Shares - Series B is initially 3,300,000 shares with 3,000,000 of these shares subscribed but unissued as at September 30, 2013. See "Note 13. Subsequent Events" for additional information related to the issuance of the Preference Shares - Series B.

The Company will pay cumulative dividends on each of the Preference Shares - Series B at a rate of 7.25% per annum on the initial liquidation preference of $50 per share (equivalent to $3.625 per annum per Preference Share - Series B or $0.90625 per quarter except on the initial payment date which is expected to be $0.745139). Dividends will accrue and accumulate from the date of issuance and, to the extent that the Company has lawfully available funds to pay dividends and the board of directors declares a dividend payable, it will pay dividends quarterly each year commencing on December 15, 2013, up to, and including, September 15, 2016 in cash and on September 15, 2016 or any earlier conversion date in cash, or common shares, or a combination thereof, at the Company’s election and subject to the share cap, which is an amount per share equal to the product of (i) 2 and (ii) the maximum conversion rate of 4.0322, subject to conversion rate adjustments.

On the mandatory conversion date, September 15, 2016, each of the then-outstanding Preference Shares - Series B will automatically convert into a variable number of the Company’s common shares equal to the conversion rate, which will not be more than 4.0322 of the Company's common shares and not less than 3.2258, subject to conversion rate adjustments, that is based on the volume weighted average price per share of the Company’s common shares over the forty consecutive trading day period beginning on, and including, the forty-second scheduled trading day immediately preceding September 15, 2016 (the "final averaging period"). The mandatory conversion date is the third business day immediately following the last trading day of the final averaging period. The conversion rate will be adjusted from time to time if the Company issues common shares as a dividend, increases the cash dividend from $0.09 per share or in some other cases as described under "Description of the Mandatory Convertible Preference Shares - Conversion Rate Adjustments" of the Form 424B2 Prospectus Supplement filed with the SEC on September 27, 2013.

At any time prior to September 15, 2016, other than during the fundamental change conversion period (as defined in the prospectus supplement), a holder of mandatory convertible preference shares may elect to convert such holder's mandatory convertible preference shares at the minimum conversion rate of 3.2258 shares of the common stock per mandatory convertible preference share, subject to adjustment as described under "Description of Mandatory Convertible Preference Shares - Conversion Rate Adjustments" of the Form 424B2 Prospectus Supplement filed with the SEC on September 27, 2013.

The Preference Shares - Series B have no voting rights other than to elect two additional members of the board of directors if dividends on the Preference Shares - Series B have not been declared and paid for the equivalent of six or more dividend periods

Preference Shares - Series A

On August 22, 2012, the Company issued six million 8.25% Preference Shares - Series A (the “Preference Shares - Series A”), par value $0.01 per share, at a price of $25 per share. The Company received net proceeds of $145,041 from its offering, after deducting expenses and underwriting discounts of $4,959. The authorized number of the Preference Shares - Series A is 6,000,000 shares with 6,000,000 of these shares issued and outstanding as at September 30, 2013. The Preference Shares - Series A have no stated maturity date and are redeemable in whole or in part at the option of the Company any time after August 29, 2017 at a redemption price of $25 per Preference Share - Series A plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

Dividends on the Preference Shares - Series A are non-cumulative. Consequently, in the event dividends are not declared on the Preference Shares - Series A for any dividend period, holders of Preference Shares - Series A will not be entitled to receive a dividend for such period, and such undeclared dividend will not accrue and will not be payable. The holders of Preference Shares - Series A will be entitled to receive dividend payments only when, as and if declared by the Company's Board of Directors or a duly authorized committee of the Board of Directors. Any such dividends will be payable from, and including, the date of original issue on a non-cumulative basis, quarterly in arrears.

10. Shareholders' Equity (continued)

To the extent declared, these dividends will accumulate, with respect to each dividend period, in an amount per share equal to 8.25% of the $25 liquidation preference per annum. During any dividend period, so long as any Preference Shares - Series A remain

outstanding, unless the full dividend for the latest completed dividend period on all outstanding Preference Shares - Series A have been declared and paid, no dividend shall be paid or declared on the common shares.

The holders of the Preference Shares - Series A have no voting rights other than the right to elect up to two of directors if preference share dividends are not declared and paid for six or more dividend periods.

During the three and nine months ended September 30, 2013, the Company declared and paid $3,093 and $9,281 in preference share dividends, respectively ($0for the three and nine months ended September 30, 2012).

Accumulated Other Comprehensive Income

The following tables set forth financial information regarding the changes in the balances of each component of accumulated other comprehensive income for the three and nine months ended September 30, 2013 and 2012.



For the Three Months Ended September 30, 2013	Change in net unrealized gains on investments			Foreign currency translation adjustments			Total
Beginning balance	$	49,247		$	(1,222	)	$	48,025
Other comprehensive income (loss) before reclassifications	5,922			(4,744		)	1,178
Amounts reclassified from accumulated other comprehensive income	(576		)	—			(576		)
Net current period other comprehensive income (loss)	5,346			(4,744		)	602
Ending balance	54,593			(5,966		)	48,627
Less: Accumulated other comprehensive income attributable to non controlling interest	—			8			8
Ending balance, Maiden shareholders	$	54,593		$	(5,974	)	$	48,619



For the Three Months Ended September 30, 2012	Change in net unrealized gains on investments			Foreign currency translation adjustments			Total
Beginning balance	$	93,830		$	1,722		$	95,552
Other comprehensive income (loss) before reclassifications	45,986			(1,700		)	44,286
Amounts reclassified from accumulated other comprehensive income	(2,410		)	—			(2,410		)
Net current period other comprehensive income (loss)	43,576			(1,700		)	41,876
Ending balance	137,406			22			137,428
Less: Accumulated other comprehensive loss attributable to non controlling interest	—			(13		)	(13		)
Ending balance, Maiden shareholders	$	137,406		$	35		$	137,441

10. Shareholders' Equity (continued)



For the Nine Months Ended September 30, 2013	Change in net unrealized gains on investments			Foreign currency translation adjustments			Total
Beginning balance	$	143,665		$	(2,539	)	$	141,126
Other comprehensive income (loss) before reclassifications	(85,415		)	(3,427		)	(88,842		)
Amounts reclassified from accumulated other comprehensive income	(3,657		)	—			(3,657		)
Net current period other comprehensive (loss) income	(89,072		)	(3,427		)	(92,499		)
Ending balance	54,593			(5,966		)	48,627
Less: Accumulated other comprehensive income attributable to non controlling interest	—			8			8
Ending balance, Maiden shareholders	$	54,593		$	(5,974	)	$	48,619



For the Nine Months Ended September 30, 2012	Change in net unrealized gains on investments			Foreign currency translation adjustments			Total
Beginning balance	$	63,737		$	314		$	64,051
Other comprehensive income (loss) before reclassifications	76,098			(292		)	75,806
Amounts reclassified from accumulated other comprehensive income	(2,429		)	—			(2,429		)
Net current period other comprehensive income (loss)	73,669			(292		)	73,377
Ending balance	137,406			22			137,428
Less: Accumulated other comprehensive loss attributable to non controlling interest	—			(13		)	(13		)
Ending balance, Maiden shareholders	$	137,406		$	35		$	137,441