By Ronda Fears
Nashville, Tenn., Sept. 19 - Selective Insurance Group Inc. sold $100 million proceeds of 30-year discount convertible notes at 38.01 for a yield-to-maturity of 4.25% and with a 30% initial conversion premium, at the aggressive end of guidance which had put the yield at 4.25%-4.75% and the conversion premium at 25-30%.
The Rule 144A deal, via lead manager Merrill Lynch & Co., was advanced to price a day early.
The issue has a cash coupon of 1.62% for the first seven years with no accretion, then reverts to a traditional zero-coupon issue accreting to par at maturity.
Selective said $60 million of proceeds, and up to $72 million if the greenshoe is exercised, will go to an irrevocable trust to pay down debt. Remaining proceeds will be used for general corporate purposes, including possible contributions to operating units.
Terms of the new deal are:
| Issuer: | Selective Insurance Group Inc.
|
| Amount: | $100 million
|
| Greenshoe: | $15 million
|
| Lead Manager: | Merrill Lynch
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| Maturity Date: | Nov. 29, 2032
|
| Coupon: | 1.62%/0%
|
| Issue Price: | 38.01
|
| Yield-to-maturity: | 4.25%
|
| Conversion Premium: | 30%
|
| Conversion Price: | $29.289
|
| Conversion Ratio: | 12.978
|
| Call: | Non-callable for five years, then at 38.012
|
| Put: | In years seven, 10, 15, 20 and 25
|
| Contingent Conversion: | 120%, declining to 110% at maturity
|
| Contingent Payment: | 120% trigger
|
| Ratings: | Moody's: expected Baa2
|
| S&P: BBB
|
| Settlement Date: | Sept. 24
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