Liberty Mutual cancels tender offer for 10.75% notes, consent solicitation for 7.5% notes

By Angela McDaniels

Tacoma, Wash., Feb. 4 - Liberty Mutual Group Inc. terminated the tender offer for its $1.25 billion of 10.75% series C junior subordinated notes and the consent solicitation for its 7.5% senior notes due 2036, according to a company news release.

Any previously tendered notes will be returned to their holders, and no consent fee will be paid.

The tender offer began Jan. 14 and was scheduled to expire at midnight ET on Feb. 4 after being extended multiple times.

Holders were offered $1,272.50 for each $1,000 principal amount of 10.75% notes plus accrued interest. This included a $50.00 early payment per note. When the offer began, only holders who tendered by the early tender deadline, 5 p.m. ET on Jan. 24, were eligible to receive the early payment, but the company later amended the offer so that all holders who tendered would receive the early payment.

The company was soliciting consents from the holders of the 7.5% notes to terminate the replacement capital covenants. The consent solicitation was scheduled to expire at 5 p.m. ET on Feb. 3 after being extended multiple times.

Liberty Mutual planned to pay a consent fee per $1,000 of notes equal to the product of $20 multiplied by a fraction, the numerator of which is the principal amount of 7.5% notes outstanding at the expiration time and the denominator of which is the total principal amount of notes for which the company receives consents.

Originally, the consent fee was going to be $5 per $1,000 of notes. The company made the change on Feb. 2.

Consents were needed from the holders of a majority of the 7.5% notes in order to make the proposed amendments.

As of Feb. 1, the company had received tenders from holders of $212,135,000 of the 10.75% notes and consents from holders of $128.99 million of the 7.5% notes.

Bank of America Merrill Lynch (888 292-0070 or 980 388-8217) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) were the dealer managers and solicitation agents. Global Bondholder Services Corp. (866 795-2200) was the information agent.

Liberty Mutual is a subsidiary of Liberty Mutual Holding Co. Inc., a Boston-based property and casualty insurer.

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