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BROWN & BROWN, INC. 8-K Report, Material Agreement (Jun 11, 2024)

Filed June 11, 2024For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) has announced the successful completion of a $600 million issuance of 5.650% Senior Notes due 2034. The net proceeds from this offering are approximately $593.2 million, which the company intends to use primarily for redeeming its 4.2% senior notes maturing in September 2024, with any remaining funds allocated for general corporate purposes. This debt offering strengthens the company's balance sheet and strategically manages its debt maturity profile. The new notes are senior unsecured obligations and rank equally with existing senior unsecured indebtedness. While the issuance includes restrictive covenants common in such agreements, they are subject to specific exceptions. Investors should note the interest rate of 5.650% and the maturity date of June 11, 2034, with semi-annual interest payments.

Key Highlights

  • 1Completed issuance of $600 million in 5.650% Senior Notes due 2034.
  • 2Net proceeds of approximately $593.2 million received from the offering.
  • 3Intends to use proceeds to redeem 4.2% senior notes due September 2024.
  • 4Remaining proceeds to be used for general corporate purposes.
  • 5Notes are senior unsecured obligations, ranking pari passu with existing senior unsecured debt.
  • 6Maturity date for the new notes is June 11, 2034.
  • 7Indenture includes restrictive covenants related to debt and asset disposition, with stated exceptions.

Frequently Asked Questions

Brown & Brown intends to use the net proceeds from this issuance primarily to redeem its 4.2% senior notes that are due in September 2024. Any remaining funds will be used for general corporate purposes.

The new notes have an aggregate principal amount of $600 million, bear interest at a rate of 5.650% per year, and mature on June 11, 2034. Interest will be paid semi-annually in arrears on June 11 and December 11 of each year, commencing December 11, 2024. The notes are senior unsecured obligations.

This issuance is a refinancing exercise, replacing existing debt with new debt. While it does not reduce the overall debt principal, it manages the company's debt maturity profile by extending the maturity and addressing the upcoming maturity of the 4.2% senior notes. The new notes are senior unsecured and rank equally with other existing senior unsecured debt.

The Indenture contains certain restrictive covenants that limit the ability of Brown & Brown and certain subsidiaries from incurring specific types of secured debt and from consolidating, merging, or transferring substantially all of the company's assets. These covenants are subject to various exceptions and qualifications outlined in the Indenture.