Fortitude Group gets $550 million unsecured credit facilities

By Sara Rosenberg

New York, June 3 – Fortitude Group Holdings LLC closed on $550 million of three-year unsecured credit facilities, according to a market source.

The facilities, which closed on Tuesday, consist of a $300 million revolver and a $250 million term loan.

Prior to the receipt of ratings, pricing will be governed by a leverage-based grid with the drawn margin ranging between Libor plus 225 basis points and Libor plus 300 bps and the commitment fee ranging between 35 bps and 50 bps, the source said. Following the receipt of ratings, pricing will be governed by the borrower’s senior unsecured rating with the drawn margin ranging between Libor plus 187.5 bps and Libor plus 275 bps and the commitment fee ranging between 25 bps and 45 bps.

HSBC Securities (USA) Inc., Citigroup Global Markets Inc., MUFG and SMBC acted as the joint bookrunners on the deal and as joint lead arrangers with BMO Capital Markets, BNP Paribas Securities Corp. and Mizuho. HSBC is the administrative agent.

The financing closed contemporaneously with the completion of the sale of a 76.6% stake in Fortitude to Carlyle and T&D Insurance Group from AIG.

At closing, AIG received about $2.2 billion in sale proceeds, including the purchase price of $1.8 billion along with additional consideration paid in accordance with the terms of the purchase agreement.

Fortitude is a provider of retroactive reinsurance and legacy run-off management solutions for long-dated, complex risks to the insurance industry.

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