W. R. Berkley greenshoe brings 5.7% debentures to $185 million

By Sarah Lizee

Olympia, Wash., April 3 – W. R. Berkley Corp. said underwriters of its 5.7% subordinated debentures due 2058 partially exercised their over-allotment option on Tuesday for an additional $10 million, bringing the total size of the issue to $185 million, according to an 8-K filing with the Securities and Exchange Commission.

The underwriters have the remaining option, exercisable until April 18, to purchase up to an additional $16.25 million of the debentures.

As previously reported, the company priced an upsized $175 million of 5.7% subordinated debentures due 2058 (Baa3/BBB-/BBB-) at par of $25 after the market close on March 19.

Pricing came in for a coupon in the 5.75% area with the deal size initially set at $100 million, according to a market source.

Morgan Stanley & Co. Inc., BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities, LLC are bookrunners for the offering.

The coupon will be paid quarterly. There is an optional deferral period for up to five consecutive years. During the optional deferral period interest will accrue and will be compounded quarterly.

The notes are freely callable on or after March 30, 2023. If the notes are not redeemed in whole, at least $25 million principal amount must remain outstanding after the redemption, according to a 424B5 filing with the Securities and Exchange Commission.

The notes may be redeemed in whole but not in part prior to March 30, 2023 upon a tax event at par plus accrued interest.

The notes may also be redeemed in whole but not in part upon a rating agency event at 102% of the principal amount plus accrued interest.

Proceeds will be used for general corporate purposes.

W.R. Berkley is a Greenwich, Conn.-based insurance holding company.

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