Fairfax announces exchange for 6 7/8%, 7 3/8% notes

New York, March 23 - Fairfax Financial Holdings Ltd. said it is offering cash and new notes for up to $275 million principal amount of its existing 7 3/8% senior notes due 2006 and up to $170 million principal amount of its existing 6 7/8% senior notes due 2008.

In parallel with the public exchange, Fairfax will also make an offer to qualified institutional buyers under Rule 144A to exchange up to $97.7 million of TIG Holdings, Inc.'s 8 1/8% senior notes due 2005 for cash and new notes of Fairfax.

The Toronto financial services company said it is carrying out the exchange to refinance its debt, reduce the amount outstanding and diversify its maturity profile.

The move is part of a deleveraging plan intended to obtain investment-grade ratings.

Fairfax has filed an F-10 registration statement with the Securities and Exchange Commission but it has not yet become effective.

Few details were included in the initial registration statement but it did indicate noteholders would be offered a cash payment, an early participation payment if they tender by an initial deadline and a choice of two series of new notes. Accrued interest will also be paid.

Terms of the new notes will be substantially identical to the old notes apart from the maturity date and coupon.

Dealer managers for the offer are Banc of America Securities LLC, Citigroup and RBC Capital Markets. The information agent is D.F. King & Co., Inc. (800 431-9633).

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