Yesterday, CNO Financial Group Inc. (CNO) announced an increase in the size of its offering of senior secured notes due 2020 to $275 million from $250 million. However, the company expects to raise only $267 million in net proceeds after making adjustments for initial purchasers' discounts and commissions and expected offering expenses.
Concurrently, CNO Financial revealed that it might boost the size of its new 6-year term loan facility to $425 million from $400 million. The company also announced an interest of 6.375% per annum on the senior notes, which will be payable on the first day of April and October every year. These notes will mature on October 1, 2020. The offer is expected to close on September 28, 2012, subject to closing conditions.
The senior secured notes will be guaranteed by CNO Financial’s domestic subsidiaries, in accordance with the company’s new senior secured credit agreement. However, CNO Financial will not register the notes and guarantees under the Securities Act or any other state securities law.
CNO Financial will use the net proceeds from the senior notes and $425 million term loan facility, along with a $250 million 4-year term loan facility under the company’s new senior secured credit agreement, for repayment of the borrowings made under the old senior secured credit agreement. The amount will also be used to purchase the outstanding 9% senior secured notes due 2018, which were tendered under a cash tender and consent solicitation announced earlier this year, and to redeem any 9% notes not purchased under the tender offer.
Further, the proceeds will be used for purchasing the outstanding 7% convertible senior debentures due 2016, worth $200 million, and for payment of fees and expenses related to the new senior notes offer. Any residual sum will be utilized to fulfill general corporate purposes.
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