New York, Sept. 20 - QBE Insurance Group Ltd. said it priced $375 million proceeds of 20-year zero-coupon senior convertible bonds to yield 2% with a 42.5% initial conversion premium.
Proceeds will be applied to repay part of the bridge loan used to fund the ING Australia general insurance acquisition and to fund £58 million of capital required by Lloyd's to support an extra £52 million of capacity for syndicate 386. QBE said it purchased the capacity at recent auctions for £13 million.
The bonds were issued under Rule 144A. The name of the underwriter was not immediately available.
"The lower cost of the senior convertible securities compared to other debt, together with the anticipated return on additional capacity in syndicate 386, are expected to be positive for basic and diluted earnings per share in 2005," said Frank O'Halloran, QBE's chief executive officer, in a news release.
He added that the U.S. dollar denomination of the debts provides a natural hedge to the "substantial" shareholders' funds in QBE's U.S. operations.
QBE is a Sydney, Australia insurance company.
| Issuer: | QBE Insurance Group Ltd.
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| Issuer: | Senior convertible bonds
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| Amount: | $375 million (proceeds)
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| Maturity: | 20 years
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| Coupon: | 0%
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| Yield: | 2%
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| Initial conversion premium: | 42.5% over A$13.13 close on Sept. 20
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| Conversion price: | A$18.71
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| Put: | In years 1, 3, 5, 7, 10 and 15, in cash or stock at QBE's option
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| Call: | After 3 years at the greater of accreted value and 28.5 million shares, in cash or stock at QBE's option
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| Distribution: | Rule 144A
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| Pricing date: | Sept. 20
|
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