American Financial to price $25-par subordinated debentures due 2055; price talk 6%-6.125%

By Stephanie N. Rotondo

Seattle, Nov. 9 – American Financial Group Inc. is planning an offering of $25-par subordinated debentures due 2055, according to a prospectus filed with the Securities and Exchange Commission on Monday.

Price talk is 6% to 6.125%, a market source reported.

BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are running the books.

The notes can be redeemed in 2020, in whole or in part, at par plus accrued interest. If the issue is not redeemed in whole at that time, $25 million of the debt must remain outstanding.

The company can also redeem the issue prior to 2020 upon a tax event or rating agency event. In the case of a tax event, the debentures must be redeemed in whole at par plus accrued interest. Upon a rating agency event, the issue must be redeemed in whole at par or a make-whole amount, whichever is greater, plus accrued interest.

Interest will be payable quarterly. The company has the right to defer interest payments for up to five consecutive years.

American Financial will list the new notes on the New York Stock Exchange under the ticker symbol “AFGH.”

Proceeds will be used for general corporate purposes, which may include common stock repurchases.

American Financial Group is a Cincinnati-based property and casualty insurance company.

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