Liberty Mutual gives early exchange tally, ups offer to $1 billion; pricing set

By Susanna Moon

Chicago, Jan. 24 – Liberty Mutual Group Inc. is now offering up to $1 billion of new senior notes due 2029 in exchange for three series of its outstanding notes, according to a company update on Thursday.

As reported Jan. 9, the issuer was originally offering to exchange up to $500 million of notes.

Holders had tendered for exchange the following amount of notes as of the early deadline of 5 p.m. ET on Jan. 23, with the issues listed in order of acceptance priority level and the total exchange value to be set per $1,000 principal amount of notes using a reference security and a fixed spread:

• $270.51 million of the $600 million 5% senior notes due 2021 with a total exchange value set at $1,032.94 using the 2.5% U.S. Treasury note due Dec. 31, 2020 plus a spread of 95 basis points for a yield of 3.52%;

• $276,691,000 of the $750 million 4.95% senior notes due 2022 with a total exchange value set at $1,043.17 using the 2.625% U.S. Treasury note due Dec. 15, 2021 plus a spread of 100 bps for a yield of 3.534%; and

• $581,155,000 of the $1 billion 4.25% senior notes due 2023 with a total exchange value set at $1,024.70 using the 2.625% U.S. Treasury note due Dec. 15, 2021 plus a spread of 110 bps for a yield of 3.634%.

Pricing for the exchange was set at 11 a.m. ET on Jan. 24.

The total amount for each $1,000 principal amount consists of $1,000 principal amount of new notes and cash.

The total exchange amount also includes an early participation premium of $30 per $1,000 principal amount of notes tendered before the early deadline of 5 p.m. ET on Jan. 23.

Each of the exchange offers will expire at 11:59 p.m. ET on Feb. 6. Tendered notes may no longer be withdrawn as of the early deadline.

Holders will also receive accrued interest up to but excluding the settlement date, provided that if the total exchange amount exceeds $1,000 per $1,000 principal amount of existing notes, the excess will be paid in cash.

The early settlement date is expected to be on Jan. 28. Settlement for any notes accepted for exchange after the early deadline is expected to be Feb. 8.

The new notes will bear interest at an annual rate equal to the sum of the 3.125% U.S. Treasury note due Nov. 15, 2028 plus 185 bps.

The exchange offers are conditioned on the issue of at least $300 million of new notes.

Global Bondholder Services Corp. (866 470-4300 or 212 430-3774) is the information agent.

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

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