By Stephanie N. Rotondo
Seattle, Sept. 22 – Arch Capital Group Ltd. sold $450 million of 5.25% series E noncumulative preferred stock (expected ratings: Baa2/BBB) at par of $25.00 on Thursday, a market source reported.
Price talk was 5.25% to 5.375%. The deal was upsized from $250 million.
The preferreds will be issued as depositary shares representing a 1/1,000th interest. There is a $67.5 million over-allotment option.
BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, J.P. Morgan Securities LLC and RBC Capital Markets are the joint bookrunners.
Dividends will be payable on the last day of March, June, September and December. The preferreds become redeemable on or after Sept. 29, 2021 at par plus accrued dividends.
Additionally, the company can redeem the issue in whole upon a change of control, or upon a change of Bermuda law, at $26.00 per share plus accrued dividends. Such a redemption must be approved by shareholders.
Upon a “capital redemption trigger date” or tax event, the preferreds can be redeemed at par plus accrued dividends.
Proceeds will be used to fund a portion of the cash consideration in regards to the United Guaranty Corp. acquisition, to pay related costs and expenses and for general corporate purposes.
Arch Capital is a Hamilton, Bermuda-based reinsurance company.
| Issuer: | Arch Capital Group Ltd.
|
| Securities: | Series E noncumulative preferred stock
|
| Amount: | $450 million, or 18 million shares
|
| Greenshoe: | $67.5 million, or 2.7 million shares
|
| Maturity: | Perpetual
|
| Bookrunners: | BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, J.P. Morgan Securities LLC, RBC Capital Markets
|
| Co-managers: | Barclays, BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, Lloyds Securities Inc., U.S. Bancorp Investments, Inc.
|
| Dividend: | 5.25%
|
| Price: | Par of $25.00
|
| Yield: | 5.25%
|
| Talk: | 5.25% to 5.375%
|
| Call options: | On or after Sept. 29, 2021 or at any time following a tax event or within 90 days of a “capital redemption trigger date” at par plus accrued dividends; or at $26.00 per share plus accrued dividends upon a change of control, if approved by shareholders
|
| Pricing date: | Sept. 22
|
| Settlement date: | Sept. 29
|
| Expected ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Expected listing: | Nasdaq: ACGLP
|
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