Protective Life buys $800 million notes at discount with deal funds

By Jennifer Chiou

New York, Oct. 15 - Protective Life Corp. announced that it used the proceeds from three recent note offerings to repurchase at a discount $800 million of surplus notes.

The company paid a total of $667 million plus accrued interest to buy the securities, giving it a gain of $126 million, after allowing for $7 million of unamortized issuance expenses.

Golden Gate Captive Insurance Co., a subsidiary of Protective Life, bought $450 million principal amount of its series A floating-rate surplus notes due 2037 from Long Island International Ltd. and $350 million principal amount of the series A notes from Lehman Brothers Bankhaus AG.

Funds for the buyback came from offerings of $400 million of senior notes due 2019, $100 million of senior notes due 2024 and $300 million of senior notes due 2039, all completed on Oct. 9.

Proceeds from the new deals were used to buy $800 million of surplus notes from Golden Gate, with Golden Gate then using those funds to repurchase the series A notes.

Protective is now the sole holder of the Golden Gate surplus notes.

The financial and insurance products provider is based in Birmingham, Ala.

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