8-KMaterial AgreementsFinancial EventsExhibits & Filings

Arthur J. Gallagher & Co. 8-K Report, Material Agreement (Aug 3, 2007)

Filed August 3, 2007For Securities:AJG

Summary

This 8-K filing from Arthur J. Gallagher & Co. (AJG), dated August 3, 2007, details the company's issuance and sale of $400 million in aggregate principal amount of senior notes through a private placement. The offering consists of $100 million of 6.26% Senior Notes, Series A, due August 3, 2014, and $300 million of 6.44% Senior Notes, Series B, due August 3, 2017. These notes are senior unsecured obligations, guaranteed by certain wholly-owned domestic subsidiaries, and rank equally with other senior unsecured indebtedness. The primary purpose of this transaction appears to be to raise capital, indicated by the significant debt issuance. Investors in these notes will receive semi-annual interest payments. The notes are callable by Gallagher with a make-whole provision, and importantly, they include a provision for holders to require repurchase at par plus accrued interest in the event of a change in control if the company does not maintain an investment grade rating.

Key Highlights

  • 1AJG issued $400 million in aggregate principal amount of senior notes via a private placement.
  • 2The offering comprises $100 million of 6.26% Senior Notes, Series A, due 2014, and $300 million of 6.44% Senior Notes, Series B, due 2017.
  • 3The notes are senior unsecured obligations of Gallagher.
  • 4Several wholly-owned domestic subsidiaries of Gallagher provide unconditional guarantees for the notes.
  • 5Gallagher can redeem the notes at any time, subject to a make-whole provision.
  • 6A change-in-control provision requires Gallagher to offer to repurchase the notes at par plus accrued interest if an investment grade rating is not maintained within 90 days of the event.
  • 7The notes were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, targeting accredited institutional investors.

Frequently Asked Questions

The filing indicates that Arthur J. Gallagher & Co. raised $400 million through the issuance of senior notes. While the specific use of proceeds is not detailed in this 8-K, such debt issuances are typically used for general corporate purposes, including funding operations, acquisitions, or refinancing existing debt.

The company issued $100 million of 6.26% Senior Notes, Series A, maturing in 2014, and $300 million of 6.44% Senior Notes, Series B, maturing in 2017. Both series are senior unsecured obligations, pay interest semi-annually, and are guaranteed by certain domestic subsidiaries.

Noteholders have a significant protection mechanism. If a 'change in control' occurs and Gallagher (or its successor) does not have an 'investment grade rating' within 90 days, the company is obligated to offer to repurchase all outstanding notes at their principal amount plus accrued interest.

No, these notes were issued in a private placement under Section 4(2) of the Securities Act of 1933 and were not registered. They were sold to certain accredited institutional investors.