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Chubb gets consents to terminate replacement capital covenant
By Marisa Wong
Morgantown, W.Va., Aug. 18 – Chubb Ltd. said subsidiary Chubb INA Holdings Inc. received the necessary consents from holders of its 6.8% debentures due 2031 to terminate a replacement capital covenant.
The consent solicitation began on Aug. 14 and expired at 5 p.m. ET on Aug. 18.
The company needed consents from holders of a majority of the principal amount of notes outstanding. Holders needed to be of record as of 5 p.m. ET on Aug. 11 to participate.
The company said it will pay the consent fee of $10 per $1,000 principal amount of debentures to eligible holders on Aug. 21.
As previously announced, the issuer sought consents to terminate the replacement capital covenant originally entered into on March 29, 2007 by Chubb Corp. The issuer is successor by merger to Chubb Corp.
The replacement capital covenant was originally entered into in favor of and for the benefit of the debentureholders in connection with the issuance by the issuer of $1 billion 6.375% directly issued subordinated capital securities due 2067.
Under the terms of the replacement capital covenant, the issuer could only repay, redeem, defease or purchase the capital securities if a specific portion of the funds used were proceeds from the sale of equity or certain equity-like securities and if such sale took place within a specified time period prior to the repayment, redemption, defeasance or repurchase.
With termination now effective, the issuer will be able to repay, redeem, defease or purchase any or all of the capital securities, regardless of the source of the consideration used to do so.
The solicitation agent is Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106). The information and tabulation agent is Global Bondholder Services Corp. (212 430-3774 or 866 807-2200).
Chubb is a property and casualty insurance company based in Zurich.
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