Summary
Arthur J. Gallagher & Co. (AJG) filed an 8-K on November 30, 2009, to report the issuance of $150 million in aggregate principal amount of 5.85% Series C Senior Notes due in 2016, 2018, and 2019. These notes are senior unsecured obligations, unconditionally guaranteed by several wholly-owned domestic subsidiaries, and rank equally with other senior unsecured indebtedness. This financing activity provides AJG with capital, likely to support its ongoing operations or strategic initiatives. The filing details the terms of the Note Purchase Agreement, including covenants requiring the maintenance of specified financial ratios and events of default. Notably, the notes are redeemable at the company's discretion, with a provision for early prepayment at par plus accrued interest (without a make-whole amount) if a change in control occurs and the company does not achieve an investment grade rating within 90 days.
Key Highlights
- 1Issuance of $150 million in 5.85% Series C Senior Notes.
- 2Notes mature in three installments: 2016, 2018, and 2019.
- 3The notes are senior unsecured obligations guaranteed by certain domestic subsidiaries.
- 4The financing was conducted through a private placement with accredited institutional investors.
- 5The Note Purchase Agreement includes covenants related to maintaining specified financial ratios.
- 6Redemption options are available for the notes, including a "make-whole amount" provision.
- 7A change in control provision requires offering to prepay notes at par if an investment grade rating is not maintained within 90 days.