By Paul A. Harris
St. Louis, Feb. 28 - Liberty Mutual Group, Inc. priced $1 billion two-part offering of hybrid securities (Ba1/BB+) in two parts on Wednesday, according to an informed source.
Citigroup, JP Morgan, Banc of America Securities LLC and Wachovia Securities were joint bookrunners.
The Boston-based insurance group priced $700 million of 7.8% series A securities at 99.801 to yield 7.817%. The series A notes have an 80-year final maturity. The scheduled maturity is in 30 years, after which the series A securities will bear interest at the original Libor spread plus 100 basis points.
The series A notes priced at a 312.5 bps spread to Treasuries, at the wide end of the Treasuries plus 300 bps price talk.
Liberty Mutual also priced $300 million of 7% series B securities with a 60-year final maturity and a 30 year scheduled maturity. The series B issue priced at 99.955 to yield 7.006%.
The series B securities are callable in 10 years, after which the interest rate will float at the original Libor spread plus 100 bps.
The series B tranche priced at a 245 bps spread to Treasuries, on the wide end of the 237.5 bps area price talk.
The securities are guaranteed by Liberty Mutual Holding Co. Inc. and by LMHC Massachusetts Holdings Inc.
| Issuer: | Liberty Mutual Group Inc.
|
| Amount: | $1 billion
|
| Bookrunners: | Citigroup, JP Morgan, Banc of America Securities LLC, Wachovia Securities
|
| Trade date: | Feb. 28
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BB+
|
| Distribution: | Rule 144A
|
|
|
| Series A
|
| Amount: | $700 million
|
| Final maturity: | March 7, 2087
|
| Scheduled maturity: | March 15, 2037
|
| Coupon: | 7.8% until March 15, 2037, then at original Libor spread plus 100 bps
|
| Price: | 99.801
|
| Yield: | 7.817%
|
| Spread: | 312.5 bps
|
| Call protection: | Non-callable
|
| Price talk: | Treasuries plus 300 bps area
|
|
|
| Series B
|
| Amount: | $300 million
|
| Final maturity: | March 7, 2067
|
| Scheduled maturity: | March 15, 2037
|
| Coupon: | 7% for first 10 years, then at original Libor spread plus 100 bps
|
| Price: | 99.955
|
| Yield: | 7.006%
|
| Spread: | 245 bps
|
| Call protection: | 10 years
|
| Price talk: | Treasuries plus 237.5 bps
|
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