Summary
Arch Capital Group Ltd. (ACGL) announced on December 9, 2016, through its wholly-owned subsidiary Arch Capital Finance LLC, the successful completion of a significant debt offering. The company issued $500 million in 4.011% senior notes due 2026 and $450 million in 5.031% senior notes due 2046, totaling $950 million. These notes are fully and unconditionally guaranteed by Arch Capital Group Ltd. The issuance was made under the company's existing universal shelf registration statement, indicating established access to public capital markets. A key aspect of this offering is a special mandatory redemption provision. The notes will be redeemed at 101% of their principal amount if a previously disclosed Stock Purchase Agreement with American International Group, Inc. (AIG) is terminated before August 31, 2017, or if the acquisition contemplated by the agreement is not completed by that date. This provision introduces a contingency for investors related to the specific acquisition, linking the repayment of these notes to the successful closing of that transaction.
Key Highlights
- 1Arch Capital Group Ltd. successfully raised $950 million through the issuance of senior notes.
- 2The offering consisted of $500 million of 4.011% senior notes due 2026 and $450 million of 5.031% senior notes due 2046.
- 3The senior notes are guaranteed by Arch Capital Group Ltd., providing a full guarantee.
- 4The issuance was completed under an existing Form S-3 universal shelf registration statement.
- 5A special mandatory redemption is triggered if the Stock Purchase Agreement with AIG is terminated before August 31, 2017, or if the acquisition is not completed by that date.
- 6In case of a special mandatory redemption, the notes will be redeemed at 101% of their principal amount plus accrued interest.
- 7The notes are unsecured and rank equally with other unsecured and unsubordinated debt of the issuer and the company.