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FBL Financial to redeem $175 million of notes at make-whole prices
By Susanna Moon
Chicago, Oct. 7 - FBL Financial Group, Inc. plans to redeem its $175 million of public debt, comprising $75 million of 5.85% senior notes due 2014 and $100 million of 5 7/8% senior notes due 2017 using some proceeds from the sale of its subsidiary EquiTrust Life Insurance Co., according to an 8-K filing with the Securities and Exchange Commission.
The company expects to redeem the notes on Jan. 30 at a make-whole redemption price of about $207 million, based on recent Treasury yields. The redemption date assumes a year-end 2011 closing, and the redemption price will be set using Treasury rates on the third business date before redemption.
Also in connection with the EquiTrust sale, $50 million of FBL's $100 million 6.1% senior notes due 2015, held by affiliates, will be redeemed at closing from affiliate Farm Bureau Property & Casualty Insurance Co.
After the redemption, $50 million of the 6.1% notes will remain, including $25 million held by Farm Bureau Property & Casualty and, subject to receipt of a waiver of the mandatory redemption provision in these notes, $25 million held by an investment affiliate of Iowa Farm Bureau Federation, FBL's majority shareholder.
Farm Bureau Property & Casualty waived the mandatory redemption provision for $25 million notes that would be triggered by the consummation of the EquiTrust transaction.
On Oct. 6, FBL entered into a stock purchase agreement with affiliates of Guggenheim Partners, LLC for the sale of all EquiTrust's shares for $440 million in cash.
FBL is a West Des Moines, Iowa-based holding company whose primary operating subsidiaries are Farm Bureau Life Insurance Co. and EquiTrust Life Insurance.
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