Liberty Mutual prices exchange, tender offers for five note series

By Wendy Van Sickle

Columbus, Ohio, May 5 – Liberty Mutual Group Inc. announced on Tuesday the pricing of two transactions to repurchase five series of its outstanding notes, including its 6.5% senior notes due 2042, its 7% senior notes due 2034, its 6.5% senior notes due 2035, its 4.85% senior notes due 2044 and its 4.5% senior notes due 2049.

The liability management exercised were announced on April 29.

Exchange offers

The first transaction consists of five separate private offers to exchange any and all of each series of existing notes for newly issued notes of Liberty Mutual and cash.

The new notes being offered in the exchange offers will be a further issuance of, and will be in addition to and form a single series with, the company’s $500 million of 3.95% senior notes due 2060 that priced on April 29. The new notes are expected to be fungible with the original notes.

The following notes are included in the private exchange offers, listed in order of acceptance priority level and with their total exchange considerations listed per $1,000 of existing notes:

• $269,852,000 6.5% senior notes due 2042 (Cusips: 53079EAZ7, U52932AS6) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 240 basis points for a total exchange consideration of $1,000 of new notes and $438.55 of cash;

• $152,647,000 7% senior notes due 2034 (Cusips: 53079EAE4, U52932AD9) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 220 bps for a total exchange consideration of $1,000 of new notes and $402.50 of cash;

• $301,113,000 6.5% senior notes due 2035 (Cusips: 53079EAG9, U52932AE7) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 220 bps for a total exchange consideration of $1,000 of new notes and $365.95 of cash;

• $613,922,000 4.85% senior notes due 2044 (Cusips: 53079EBF0, U52932AX5, U52932AY3) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 240 bps for a total exchange consideration of $1,000 of new notes and $202.96 of cash; and

• $350 million 4.5% senior notes due 2049 (Cusips: 53079EBH6, U52932BE6, U52932BF3) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 245 bps for a total exchange consideration of $1,000 of new notes and $150.68 of cash.

The aggregate principal amount of the new notes issuable in the exchange offers is limited to $500 million.

Cash offers

The second transaction consists of five separate offers to purchase for cash any and all of each series of existing notes.

The following notes are included in the cash offers, listed in order of acceptance priority level and with their total tender considerations listed per $1,000 of existing notes:

• $269,852,000 6.5% senior notes due 2042 (Cusips: 53079EAZ7, U52932AS6) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 240 bps for a total tender consideration of $1,415.13;

• $152,647,000 7% senior notes due 2034 (Cusips: 53079EAE4, U52932AD9) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 220 bps for a total tender consideration of $1,379.08;

• $301,113,000 6.5% senior notes due 2035 (Cusips: 53079EAG9, U52932AE7) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 220 bps for a total tender consideration of $1,342.53;

• $613,922,000 4.85% senior notes due 2044 (Cusips: 53079EBF0, U52932AX5, U52932AY3) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 240 bps for a total tender consideration of $1,179.54; and

• $350 million 4.5% senior notes due 2049 (Cusips: 53079EBH6, U52932BE6, U52932BF3) with pricing set using the 2.375% Treasury due Nov. 15, 2049 plus 245 bps for a total tender consideration of $1,127.26.

The maximum aggregate amount of cash that Liberty Mutual will use to purchase all validly tendered existing notes in the cash offers is $25 million.

Under each of the exchange and cash offers, holders will also receive accrued interest.

Pricing was determined at 2 p.m. ET on May 5.

Each of the exchange and cash offers was set to expire at 5 p.m. ET on May 5.

Tenders of existing notes under the exchange and cash offers may be withdrawn at any time at or prior to the expiration time.

The settlement date for each offer is expected to be May 7.

The exchange offers are conditioned on the closing of the corresponding cash offer for each series and vice versa.

Global Bondholder Services Corp. (866 470-4300 toll free or 212 430-3774 collect) will act as the information agent, exchange agent and tender agent.

Liberty Mutual is a Boston-based property and casualty insurance company.

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