W.R. Berkley greenshoe lifts 5.9% subordinated notes to $110 million

By Susanna Moon

Chicago, March 1 – W.R. Berkley Corp. said underwriters exercised $10 million of the over-allotment option on its 5.9% $25-par subordinated debentures due March 1, 2056.

The greenshoe exercise on March 1 brings the total deal size to $110 million, and underwriters have until March 24 to exercise an over-allotment option for up to $5 million more debentures, according to a company press release.

As previously reported, the company sold $100 million of the debentures on Feb. 23, and the deal came in line with the 5.9% price talk but was downsized from an expected $150 million.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC ran the books.

Interest will be payable on a quarterly basis. The company has the right to defer the payments for up to five consecutive years, during which time the interest is compounded quarterly.

The securities become redeemable in whole or in part on or after March 1, 2021 at par plus accrued interest. If the issue is not redeemed in whole, $25 million must remain outstanding.

Also, the company can redeem the notes prior to 2021 within 90 days of a tax or rating agency event. Upon a tax event, the redemption price will be par plus accrued interest, while in the case of a rating agency event, holders will receive the greater of the notes’ principal amount or a make-whole amount.

Proceeds will be used for general corporate purposes.

W.R. Berkley is a Greenwich, Conn.-based insurance holding company.

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