Summary
Ameriprise Financial, Inc. (AMP) filed an 8-K on May 26, 2006, to report the issuance of $500 million in 7.518% Junior Subordinated Notes due 2066. This issuance was conducted under a shelf registration statement and involves a complex debt structure with a fixed interest rate for the initial ten years and a floating rate thereafter, tied to LIBOR plus a 290.5 basis point margin. Investors should note the potential for deferred interest payments for up to ten years, which adds a layer of risk to the "junior subordinated" nature of this debt. The company also retains the option to redeem these notes at par on or after June 1, 2016. The filing also confirms the material definitive agreements related to this debt issuance, including the underwriting agreement with Lehman Brothers Inc. and J.P. Morgan Securities Inc., and the relevant indenture documents.
Key Highlights
- 1Issuance of $500 million in 7.518% Junior Subordinated Notes due 2066.
- 2Fixed interest rate of 7.518% for the first 10 years (until June 1, 2016).
- 3Floating interest rate thereafter, based on 3-month LIBOR plus 290.5 basis points.
- 4Company has the right to defer interest payments for up to ten years.
- 5Notes are redeemable by Ameriprise at par on or after June 1, 2016.
- 6Underwritten by Lehman Brothers Inc. and J.P. Morgan Securities Inc.
- 7The issuance is part of a shelf registration statement filed on Form S-3.