Fairfax Announces Pricing of Senior Notes Offering
August 11 2022 - 6:06PM
Fairfax Financial Holdings Limited (“Fairfax”) (TSX: FFH and FFH.U)
announces that it has priced a private offering of US$750,000,000
of Fairfax’s Senior Notes due 2032 (the “Notes”) at an issue price
of 99.856%. The Notes will be unsecured obligations of Fairfax and
will pay a fixed rate of interest of 5.625% per annum. Fairfax also
intends to enter into a registration rights agreement in connection
with the offering.
Fairfax intends to use substantially all of the
net proceeds of this offering to purchase a portion of the
non-controlling interests in Allied World Assurance Company
Holdings, Ltd (“Allied World”), and use any remainder for general
corporate purposes. The offering is expected to close on or about
August 16, 2022, subject to the satisfaction of customary
conditions.
The offering is being made solely by means of a
private placement either to qualified institutional buyers pursuant
to Rule 144A under the U.S. Securities Act of 1933, as amended (the
“Securities Act”), or to certain non-U.S. persons in offshore
transactions pursuant to Regulation S under the Securities Act. The
Notes have not been registered under the Securities Act and the
Notes may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act. The Notes have not
been and will not be qualified for sale under the securities laws
of any province or territory of Canada and may not be offered or
sold directly or indirectly in Canada or to or for the benefit of
any resident of Canada, except pursuant to applicable prospectus
exemptions.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be
any sale of the Notes in any jurisdiction in which such offer,
solicitation or sale would be unlawful. Any offers of the Notes
will be made only by means of a private offering memorandum.
Fairfax is a holding company which, through its
subsidiaries, is primarily engaged in property and casualty
insurance and reinsurance and the associated investment
management.
For further information contact: |
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John Varnell, Vice President, Corporate Development at |
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(416) 367-4941 |
Forward-looking information
Certain statements contained herein may include
“forward-looking information” within the meaning of Canadian
securities laws and “forward-looking statements” within the meaning
of Section 27A of the U.S. Securities Act of 1933, as amended,
Section 21E of the U.S. Securities Exchange Act of 1934, as
amended, “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations. Such forward-looking information
may include, among other things, the intended use of net proceeds
from the offering of Notes and the anticipated completion of the
offering of Notes. Such forward-looking information are subject to
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Fairfax to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
information. Such factors include, but are not limited to: the
failure to successfully complete the offering; our ability to
purchase a portion of the non-controlling interests in Allied World
with the net proceeds of the offering; our ability to complete the
proposed sale of all of our interests in the Crum & Forster Pet
Insurance Group™ and Pethealth Inc. and the financial impacts on us
expected to result therefrom; our ability to complete the proposed
joint acquisition of Atlas Corp.; a reduction in net earnings if
our loss reserves are insufficient; underwriting losses on the
risks we insure that are higher than expected; the occurrence of
catastrophic events with a frequency or severity exceeding our
estimates; changes in market variables, including interest rates,
foreign exchange rates, equity prices and credit spreads, which
could negatively affect our investment portfolio; risks associated
with the global pandemic caused by COVID-19 and the conflict in
Ukraine, and the related global reduction in commerce and
substantial downturns in stock markets worldwide; the cycles of the
insurance market and general economic conditions, which can
substantially influence our and our competitors’ premium rates and
capacity to write new business; insufficient reserves for asbestos,
environmental and other latent claims; exposure to credit risk in
the event our reinsurers fail to make payments to us under our
reinsurance arrangements; exposure to credit risk in the event our
insureds, insurance producers or reinsurance intermediaries fail to
remit premiums that are owed to us or failure by our insureds to
reimburse us for deductibles that are paid by us on their behalf;
our inability to maintain our long term debt ratings, the inability
of our subsidiaries to maintain financial or claims paying ability
ratings and the impact of a downgrade of such ratings on derivative
transactions that we or our subsidiaries have entered into; risks
associated with implementing our business strategies; the timing of
claims payments being sooner or the receipt of reinsurance
recoverables being later than anticipated by us; risks associated
with any use we may make of derivative instruments; the failure of
any hedging methods we may employ to achieve their desired risk
management objective; a decrease in the level of demand for
insurance or reinsurance products, or increased competition in the
insurance industry; the impact of emerging claim and coverage
issues or the failure of any of the loss limitation methods we
employ; our inability to access cash of our subsidiaries; our
inability to obtain required levels of capital on favourable terms,
if at all; the loss of key employees; our inability to obtain
reinsurance coverage in sufficient amounts, at reasonable prices or
on terms that adequately protect us; the passage of legislation
subjecting our businesses to additional adverse requirements,
supervision or regulation, including additional tax regulation, in
the United States, Canada or other jurisdictions in which we
operate; risks associated with applicable laws and regulations
relating to sanctions and corrupt practices in foreign
jurisdictions in which we operate; risks associated with government
investigations of, and litigation and negative publicity related
to, insurance industry practice or any other conduct; risks
associated with political and other developments in foreign
jurisdictions in which we operate; risks associated with legal or
regulatory proceedings or significant litigation; failures or
security breaches of our computer and data processing systems; the
influence exercisable by our significant shareholder; adverse
fluctuations in foreign currency exchange rates; our dependence on
independent brokers over whom we exercise little control;
impairment of the carrying value of our goodwill, indefinite-lived
intangible assets or investments in associates; our failure to
realize deferred income tax assets; technological or other change
which adversely impacts demand, or the premiums payable, for the
insurance coverages we offer; disruptions of our information
technology systems; assessments and shared market mechanisms which
may adversely affect our insurance subsidiaries; and adverse
consequences to our business, our investments and our personnel
resulting from or related to the COVID-19 pandemic. Additional
risks and uncertainties are described in our most recently issued
Annual Report which is available at www.fairfax.ca and in our Base
Shelf Prospectus (under “Risk Factors”) filed with the securities
regulatory authorities in Canada, which is available on SEDAR at
www.sedar.com. Fairfax disclaims any intention or obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
required by applicable securities law.
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