8-KOther EventsExhibits & Filings

ARCH CAPITAL GROUP LTD. 8-K Report, Corporate Update (Aug 25, 2017)

Filed August 25, 2017For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) announced on August 25, 2017, the closing of its public offering of 8,000,000 Depositary Shares, each representing a 1/1,000th interest in its 5.45% Non-Cumulative Preferred Shares, Series F. This offering was further supplemented by the underwriters exercising their option to purchase an additional 1,200,000 Depositary Shares, bringing the total offering size to 9,200,000 Depositary Shares. In addition to the new preferred share offering, the company also provided updates on the redemption of its existing Series C Non-Cumulative Preferred Shares. Arch Capital is redeeming 1,200,000 of these shares on September 25, 2017, at a price of $25.00 per share plus accrued dividends. This follows a previous announcement of the redemption of 8,000,000 Series C shares on September 18, 2017, at $25.365625 per share inclusive of dividends. These actions indicate a strategic refinement of the company's capital structure.

Key Highlights

  • 1Arch Capital Group Ltd. completed a public offering of 8,000,000 Depositary Shares representing 5.45% Series F Non-Cumulative Preferred Shares.
  • 2Underwriters exercised an option to purchase an additional 1,200,000 Depositary Shares, increasing the total offering to 9,200,000 shares.
  • 3The company is redeeming 1,200,000 outstanding 6.75% Series C Non-Cumulative Preferred Shares on September 25, 2017.
  • 4The redemption price for the Series C shares is $25.00 per share, plus declared and unpaid dividends.
  • 5A prior redemption of 8,000,000 Series C shares is scheduled for September 18, 2017, at $25.365625 per share.
  • 6The company issued a press release on August 25, 2017, announcing the closing of the additional share sale.

Frequently Asked Questions

The company offered 9,200,000 Depositary Shares, each representing a 1/1,000th interest in a 5.45% Non-Cumulative Preferred Share, Series F. While the filing doesn't state the total proceeds, the par value of the preferred shares is $25.00 each, suggesting a significant capital raise.

The company has not explicitly stated the reason for the redemption in this filing. However, such actions often occur when a company can refinance its debt or preferred equity at a lower cost, or to optimize its capital structure. The issuance of new preferred shares (Series F) might be related to this strategy.

For the 1,200,000 shares to be redeemed on September 25, 2017, the aggregate redemption price is $30 million ($25.00 per share * 1,200,000 shares), plus any declared and unpaid dividends. The separate redemption of 8,000,000 shares on September 18, 2017, will have a different total cost based on its specific redemption price.

The new Series F Non-Cumulative Preferred Shares have a dividend rate of 5.45%.