CORRESP 22 filename22.htm

BY EDGAR AND BY HAND

May 9, 2007

Mary Fraser
Division of Corporate Finance
United States Securities and Exchange Commission
Mail Stop 6010
100 F Street N.E.
Washington, D.C. 20549


Re:	Greenlight Capital Re, Ltd. Amendment No. 4 to Form S-1 Registration Statement File No. 333-139993

Dear Ms. Fraser:

This letter is being submitted in response to the comments given by the Staff of the Division of Corporate Finance of the United States Securities and Exchange Commission (the ‘‘Commission’’) set forth in your letter dated May 1, 2007 to Leonard Goldberg, Chief Executive Officer of Greenlight Capital Re, Ltd. (the ‘‘Company’’), with respect to the above-referenced registration statement (the ‘‘Registration Statement’’). We are authorized by the Company to provide the responses contained in this letter on behalf of the Company.

We note that, in addition to changes that have been made to reflect the Staff’s comments, portions of the Registration Statement have been updated to include financial information for the three-month period ended March 31, 2007.

Where indicated below, requested changes have been included in Amendment No. 4 to the Registration Statement, which is being filed simultaneously with the response.

For your convenience, we set forth each comment from your letter in bold typeface and include the Company’s response below it.

Summary – page 1

Our Competitive Strengths – page 4

Please refer to the second bullet and your response to comment 10. You indicate that you do not measure your economic success with respect to a contract in any given accounting period but rather at the end of the life of a contract. You also indicate, that most of your contracts have a term of one year. Please tell us, with a view towards disclosure in the registration statement, why your annual results would not be a good measure of your economic success for a contract that has a term of one year. Also, in light of the one year terms of your agreements, please revise the disclosure in the document to explain what you mean when you use the phrase ‘‘long-term economic results.’’

We note the Staff’s comment and the Registration Statement has been amended to describe that while a majority of our contracts have a one-year term, we expect to pay losses on many of these contracts for a number of years. We have deleted ‘‘long-term’’ from the phrase ‘‘long-term economic results.’’ Please see pages 3, 4, 57 and 58 of the Registration Statement.

Our Challenges – page 5


2.	Please revise the heading ‘‘Our Challenges’’ to use the term ‘‘risks,’’ ‘‘weaknesses’’ or a similar term indicating the nature of the items presented in this discussion.

The Registration Statement has been amended to reflect the Staff’s comment. The heading has been renamed ‘‘Risks That Could Impact Our Business and Competitive Strengths.’’ Please see page 5 of the Registration Statement.


3.	Please refer to the fourth bullet on page 5. This bullet now states that ‘‘making long equity investments in an up or rising market may increase the risks of generating profits on these investments.’’ Generating profits does not appear to be a risk. Please revise the disclosure as appropriate.

The Registration Statement has been amended to reflect the Staff’s comments. Please see pages 5 and 22 of the Registration Statement.

Our Strategy – page 5

Please refer to the second bullet on page 6. There, you say that you intend to manage your capital ‘‘conservatively’’ with respect to your investment activities. Pages 21- 25, however, contain 15 risk factors relating to the risky and unusual aspects of your investment strategy and your relationship to your investment advisor. Accordingly, it does not appear accurate to describe your investment activities as conservative. Please delete that reference, or explain to us why it is appropriate.

The Registration Statement has been amended so as to delete ‘‘conservatively’’ and the reference to ‘‘investments’’ in the bullet point entitled: ‘‘Manage Capital Prudently.’’ Please see pages 6 and 59 of the Registration Statement.

Additional Risks Relating to Our Business and This Offering – page 6


5.	Please update the information regarding your letter of credit facilities to the most recent practicable date.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page 7 of the Registration Statement.


6.	Please tie the information in the third bullet to the relevant contracts you are insuring and disclose the percentage of your revenues attributable to contracts that could be affected by this factor.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page 7 of the Registration Statement.

Recent Developments – page 7


7.	Please tell us, with a view towards disclosure in the prospectus, whether you have other investments in sub-prime mortgages or sub-prime mortgage lenders. We may have additional comments after reviewing your response.

As of March 31, 2007, our investments in sub-prime mortgage lenders (New Century Financial Corp., Fieldstone Investment Corp. and People’s Choice) constituted less than one half of 1% of our total invested capital. We have disclosed this fact in the ‘‘Management’s Discussion and Analysis’’ section on page 46 of the Registration Statement. As of March 31, 2007, we do not have any investments in sub-prime mortgages.

Risk Factors – page 12


8.	We are unable to agree with your response to comment 16. The revenues generated from your agreement with First Protective Insurance Company constitute 78.3% of your premiums written. Therefore, it appears to us that you are substantially dependent on this agreement. Please file this agreement and any other agreements on which you are substantially dependent.

The fact that you believe you will be significantly better positioned to compete for and underwrite a number of sizeable contracts after the conclusion of this offering, does not impact our view that you are currently substantially dependent on this agreement. It would be

anticipated that as your business grows and you underwrite more business that each agreement becomes less material. However, the requirement is that you file agreements upon which you are substantially dependent on, as opposed to agreements that you believe you will continue to be dependent on in the future.

We note your statement that as of March 31, 2007 you had bound 16 contracts. If you continue to believe you are not substantially dependent on any agreements due to this new business, please provide a new analysis explaining the basis for the determination. Your analysis should address your current business, including newly bound contracts for which you have received revenues, as opposed to expected business. The percentage of revenues contributed by the largest agreements should be clear from the analysis.

We appreciate the Staff’s consideration to our response to Comment 16 of the April 3, 2007 letter. We recognize that there is little precedent as to what it means to be ‘‘substantially dependent’’ and that reasonable minds may differ. In response to the Staff’s request, on May 7, 2007, we filed the Company’s agreement with First Protective Insurance Company as an exhibit to Amendment No. 3 of the Company’s Form S-1 with a request for confidential treatment for certain portions of the agreement pursuant to Rule 406 of the Securities Act. By UPS and under cover of a letter dated May 7, 2007, we sent the Staff a courtesy copy of the amendment and the confidential treatment request.

Current legal and regulatory activities relating to certain insurance products could affect our business, results of operations and financial condition. – page 20

We note the revision you made to this risk factor in response to comment 3. Please provide a reasonably detailed discussion of what the ‘‘contractual provision’’ you are referring to is, an explanation of what the risk is, and what the potential adverse consequences are. Your current disclosure is very vague and still does not identify a specific risk. Readers need to know what you mean when you talk about your clients participating ‘‘in the loss experience of underlying risks.’’

The Registration Statement has been amended to reflect the Staff’s comments. Please see pages 20 and 21 of the Registration Statement.

New Florida legislation could adversely affect the market for Florida-specific programs and, if replicated by other jurisdictions, could adversely affect the U.S. reinsurance market and our business. – page 21


10.	The revised risk factor states that your contract is ‘‘structured such that the premium and economics of the contract are not immediately impacted by the new Florida legislation.’’ Please expand the risk factor to discuss when the premium and economics will be impacted and what the likely impact will be.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page 21 of the Registration Statement.

Our investment performance may suffer as a result of adverse capital market developments or other factors and impact our liquidity, which could in turn adversely affect our financial condition and results of operations. – page 22


11.	Please revise the risk factor to address your investment losses in the first quarter.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page 22 of the Registration Statement.

12.

You now state that the Lehman U.S. Aggregate Bond Index is used by bond funds as a benchmark to measure their performance. You also state that the Standard & Poor’s 500 Index is used by equity funds as a benchmark. Since you are not a bond fund or an equity fund, it is not clear what the relevance of this information is to your investment returns. We particularly do not understand the relevance of the bond index to your performance as you state that your investments are, almost totally, in the equity markets. Are you suggesting that your investment portfolio somehow parallels that of the equity fund? If so, that statement would appear to be inconsistent with your description of the current content of your portfolio as described in the first risk factor on page 23. Please expand the risk factor to explain why you have included this information and what you want a reader to conclude from it. In the alternative, delete it.

The Registration Statement has been amended to reflect the Staff’s comments and the references to the Lehman U.S. Aggregate Bond Index and the Standard & Poor’s 500 Index have been deleted. Please see page 22 and 58 of the Registration Statement.

DME Advisors may serve on boards and committees. – page 24


13.	Please revise the subheading to describe the potential adverse consequences of the risk you identify.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page 24 of the Registration Statement.


14.	The last sentence of the risk factor now states that ‘‘During Mr. Einhorn’s tenure as a director of New Century, DME Advisors was periodically restricted from trading in New Century securities.’’ Please briefly describe these instances.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page 24 of the Registration Statement.


15.	Please expand the risk factor to identify the other companies in which you are invested that DME Advisors or an affiliate of DME or you serves on boards and committees. Provide a significantly more detailed discussion of this risk and its potential adverse consequences in the ‘‘Business’’ section of the prospectus.

The Registration Statement has been amended to reflect the Staff’s comments. Please see pages 25, 71 and 72 of the Registration Statement.

Increased regulation or scrutiny of alternative investment strategies may affect our investment portfolio or our business reputation. – page 25


16.	Please expand the risk factor, and provide a more detailed discussion in the body of the prospectus, regarding the specific ‘‘alternative investment strategies’’ that have recently come under increased scrutiny by regulatory officials. Also describe the new regulations and oversight that have been proposed to address these issues.

The Registration Statement has been amended to reflect the Staff’s comments. Please see pages 26, 71 and 72 of the Registration Statement.


17.	Please include a risk factor that addresses the fact that DME Advisors is entitled to an incentive bonus even when the company’s portfolio loses money.

In response to the Staff’s request, we have added a new risk factor on page 26 of the Registration Statement. We note, however, that DME Advisors is not entitled to receive performance compensation in a year in which the investment portfolio loses money and have clarified the language on 67 of the Registration Statement to reflect this fact.

Business – page 52


18.	Please expand the discussion under ‘‘Company Overview’’ to disclose your results for the first quarter of this year, including the losses in your investment portfolio.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page 56 and 57 of the Registration Statement.

Consolidated Financial Statements

Notes to Consolidated Financial Statements

Note 2: Summary of Significant Accounting Policies

Recently Issued Accounting Standards, page F-11


19.	We acknowledge your response to our previous comment 29. Please revise your disclosure regarding the adoption of SFAS 159 to include the potential impact on your cash flow classification for trading securities and related items. Please see paragraphs 16 and A42 of SFAS 159.

The Registration Statement has been amended to reflect the Staff’s comments. Please see page F-27 of the Registration Statement.

* * * * *

For your convenience, we have supplementally provided you with (i) four copies of Amendment No. 4 to the Registration Statement; and (ii) four blacklined copies of Amendment No. 4 to the Registration Statement reflecting the changes made to Amendment No. 2 of the Registration Statement.

Thank you for your consideration. If you have any further questions or comments, please contact me at (212) 872-1095.

Sincerely,

Kerry E. Berchem


Cc:	Leonard Goldberg Bruce Mendelsohn