Assurant gets new $1.5 billion bridge loan for Warranty Group merger

By Marisa Wong

Morgantown, W.Va., Jan. 9 – Assurant Inc. entered into a new commitment letter on Jan. 8 with Morgan Stanley Senior Funding, Inc., JPMorgan Chase Bank, NA, Wells Fargo Bank, NA and Wells Fargo Securities, LLC for a $1.5 billion 364-day senior unsecured bridge loan, according to an 8-K filing with the Securities and Exchange Commission.

Assurant entered into the new commitment letter in connection with entering into an amended and restated merger agreement with Warranty Group. The $2.5 billion merger was originally announced in October. The companies amended the structure of the merger, and now Assurant will acquire TWG Holdings Ltd. and its subsidiaries and remain a Delaware corporation. The changes incorporate recently enacted U.S. tax legislation and allow Assurant to simplify the overall deal structure, according to a press release.

The new bridge facility will replace the company’s original bridge facility dated Oct. 17. The previous facility consisted of a $1 billion 364-day senior unsecured bridge loan.

The new facility consists of a $1 billion backstop tranche and a $500 million incremental tranche.

Borrowings will bear interest at Libor plus 100 basis points to 187.5 bps initially, depending on ratings. Pricing steps up by 25 bps every 90 days to a final range of 175 bps to 262.5 bps.

The commitments are subject to some closing conditions, including completion of the merger, which is expected to close in the second quarter.

Based in New York, Assurant provides risk management solutions. Chicago-based Warranty Group is a provider of protection plans and related programs and is a portfolio company of TPG Capital.

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