In order to refinance an earlier debt,
American Financial Group Inc.
), has issued notes worth $125 million. The notes bear an interest
rate of 5.75% and are scheduled to mature on August 25, 2042.
However, the company will allow the redemption at 100% of the
principal amount plus accrued and unpaid interest on these notes
from August 25, 2017.
The company is also expected to submit an application for the
listing of these unsecured senior notes on The New York Stock
Exchange. On receiving approval from the regulatory bodies, trading
should begin in 30 days after issuance, with the "AFA" symbol.
The proceeds from this issue will be used to buy back 7.125%
senior debenture worth $115 million, scheduled to mature in 2034.
The redemption amount will not only include the principal but also
the interest accrued, excluding the date of redemption. The
proceeds will be used to finance the daily operations of the
American Financial Group and aid its working capital.
Merrill Lynch, the financial management and advisory unit of
Bank of America Corporation
), UBS Securities LLC, an operating unit of
) and Wells Fargo Securities, LLC, a unit of
Wells Fargo & Company
), are the joint bookrunning managers for the sale of these
The company's closest competitor,
), also recently vended senior unsecured notes worth $750 million
with an interest rate of 4.125%, scheduled to mature on February
15, 2042. The notes will be utilized for business operations and to
retire senior notes worth $750 million that are due to mature in
August and November 2013.
According to Reuters, Moody's Investor Service of
has conferred a rating of Baa2 to the senior unsecured notes issued
by American Financial Group, with a positive outlook and a rating
of "a3" on the senior notes of MetLife with a stable outlook. Both
the companies retain a Zacks #3 Rank, which translates into a
short-term Hold rating.
AMER FINL GROUP (AFG): Free Stock Analysis
BANK OF AMER CP (BAC): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
METLIFE INC (MET): Free Stock Analysis Report
UBS AG (UBS): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
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