CARMEL, Ind., May 19, 2015 /PRNewswire/ -- CNO Financial
Group, Inc. (NYSE: CNO) ("CNO") announced today the completion of
debt refinancing transactions to enhance its capital structure and
financial flexibility. The recapitalization transactions included
entering into a new $150 million
senior unsecured revolving credit facility (the "new revolving
credit facility"), with $100 million
drawn at closing, as well as the previously announced registered
public offering of $825 million of
new senior unsecured notes, consisting of $325 million of 4.500% senior unsecured notes due
2020 (the "2020 Notes") and $500
million of 5.250% senior unsecured notes due 2025 (the "2025
notes" and, together with the 2020 Notes, the "Notes").
CNO used a portion of the proceeds from the borrowings under the
new revolving credit facility and the issuance of the Notes to:
- repay all $502 million
outstanding under CNO's existing senior secured credit
agreement;
- redeem and satisfy and discharge $275
million aggregate principal amount outstanding of CNO's
6.375% Senior Secured Notes due 2020 for estimated aggregate
consideration of approximately $293
million; and
- pay fees and expenses related to the recapitalization
transactions.
The remaining proceeds will be used for general corporate
purposes, including common stock repurchases.
"Our continued strong operating performance, capital
strength and ratings momentum positioned us to take advantage of
favorable capital market conditions to increase our financial
flexibility by tapping into the funded bank revolver market,
issuing unsecured debt with investment grade-like covenants and
improving our debt maturity profile," said Ed Bonach, CEO of CNO. "Further, we
modestly upsized the offering on strong demand and, when
considering the elimination of scheduled amortization this year and
next, increased by over $220 million
our future deployable capital."
In connection with the recapitalization transactions described
above, CNO expects to record a one-time charge of approximately
$22 million, net of income taxes, in
the second quarter of 2015, consisting of a redemption premium on
the 6.375% Senior Secured Notes and the write-off of unamortized
discount and issuance costs.
Following the completion of the recapitalization transactions,
CNO also provided today updated 2015 guidance on select financial
measures:
- Common stock repurchases of approximately $350 million to $425 million, absent compelling
alternatives
- Targeted consolidated risk-based capital ratio of approximately
425%
- Targeted minimum holding company cash and investments of
approximately $300 million
Goldman, Sachs and Co. and RBC Capital Markets, LLC acted as
joint book-running managers for the offering of the Notes.
KeyBank National Association, RBC Capital Markets and Goldman
Sachs Bank USA acted as joint lead
arrangers and joint book-runners for the new revolving credit
facility.
The Notes were offered pursuant to CNO's shelf registration
statement, which became automatically effective upon filing with
the Securities and Exchange Commission and is available online at
www.sec.gov. A prospectus supplement and accompanying
prospectus describing the terms of the offering have been filed
with the Securities and Exchange Commission, and may be obtained
online at www.sec.gov or from: Goldman, Sachs & Co.,
Attention: Prospectus Department, 200 West Street, New York, NY 10282, by phone at (866) 471-2526
or by email at prospectus-ny@ny.email.gs.com, or RBC Capital
Markets, LLC, Attention: Investment Grade Syndicate Desk, Three
World Financial Center, 200 Vesey Street, 8th Floor, New York, NY 10281, by phone at (866) 375-6829
or by email at rbcnyfixedincomeprospectus@rbccm.com.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the Notes or any other
securities.
About CNO
CNO Financial Group, Inc. (NYSE: CNO) is a
holding company. Our insurance subsidiaries – principally
Bankers Life and Casualty Company, Colonial Penn Life Insurance
Company and Washington National Insurance Company – primarily serve
middle-income pre-retiree and retired Americans by helping them
protect against financial adversity and provide for a more secure
retirement.
Cautionary Statement Regarding Forward-Looking
Statements. Our statements, trend analyses and other
information contained in this press release relative to
markets for CNO Financial's products and trends in CNO Financial's
operations or financial results, as well as other statements,
contain forward-looking statements within the meaning of the
federal securities laws and the Private Securities Litigation
Reform Act of 1995. Forward-looking statements typically are
identified by the use of terms such as "anticipate," "believe,"
"plan," "estimate,""expect," "project," "intend," "may," "will,"
"would," "contemplate," "possible," "attempt," "seek," "should,"
"could," "goal," "target," "on track," "comfortable with,"
"optimistic," "guidance," "outlook" and similar words, although
some forward-looking statements are expressed differently. You
should consider statements that contain these words carefully
because they describe our expectations, plans, strategies and goals
and our beliefs concerning future business conditions, our results
of operations, financial position, and our business outlook or they
state other ''forward-looking'' information based on currently
available information. Assumptions and other important factors that
could cause our actual results to differ materially from those
anticipated in our forward-looking statements include, among other
things: (i) changes in or sustained low interest rates causing
reductions in investment income, the margins of our fixed annuity
and life insurance businesses, and sales of, and demand for, our
products; (ii) expectations of lower future investment
earnings may cause us to accelerate amortization, write down the
balance of insurance acquisition costs or establish additional
liabilities for insurance products; (iii) general economic, market
and political conditions, including the performance and
fluctuations of the financial markets which may affect the value of
our investments as well as our ability to raise capital or
refinance existing indebtedness and the cost of doing so; (iv) the
ultimate outcome of lawsuits filed against us and other legal and
regulatory proceedings to which we are subject; (v) our ability to
make anticipated changes to certain non-guaranteed elements of our
life insurance products; (vi) our ability to obtain adequate and
timely rate increases on our health products, including our
long-term care business; (vii) the receipt of any required
regulatory approvals for dividend and surplus debenture interest
payments from our insurance subsidiaries; (viii) mortality,
morbidity, the increased cost and usage of health care services,
persistency, the adequacy of our previous reserve estimates and
other factors which may affect the profitability of our insurance
products; (ix) changes in our assumptions related to deferred
acquisition costs or the present value of future profits; (x) the
recoverability of our deferred tax assets and the effect of
potential ownership changes and tax rate changes on their value;
(xi) our assumption that the positions we take on our tax return
filings will not be successfully challenged by the Internal Revenue
Service; (xii) changes in accounting principles and the
interpretation thereof; (xiii) our ability to continue to satisfy
the financial ratio and balance requirements and other covenants of
our debt agreements; (xiv) our ability to achieve
anticipated expense reductions and levels of operational
efficiencies including improvements in claims adjudication and
continued automation and rationalization of operating systems, (xv)
performance and valuation of our investments, including the impact
of realized losses (including other-than-temporary impairment
charges); (xvi) our ability to identify products and markets in
which we can compete effectively against competitors with greater
market share, higher ratings, greater financial resources and
stronger brand recognition; (xvii) our ability to generate
sufficient liquidity to meet our debt service obligations and other
cash needs; (xviii) our ability to maintain effective controls over
financial reporting; (xix) our ability to continue to recruit and
retain productive agents and distribution partners; (xx) customer
response to new products, distribution channels and marketing
initiatives; (xxi) our ability to achieve additional upgrades of
the financial strength ratings of CNO Financial and our insurance
company subsidiaries as well as the impact of our ratings on our
business, our ability to access capital and the cost of capital;
(xxii) regulatory changes or actions, including those relating to
regulation of the financial affairs of our insurance companies,
such as the payment of dividends and surplus debenture interest to
us, regulation of the sale, underwriting and pricing of products,
and health care regulation affecting health insurance products;
(xxiii) changes in the Federal income tax laws and regulations
which may affect or eliminate the relative tax advantages of some
of our products or affect the value of our deferred tax assets;
(xxiv) availability and effectiveness of reinsurance arrangements,
as well as any defaults or failure of reinsurers to perform; (xxv)
the performance of third party service providers and potential
difficulties arising from outsourcing arrangements; (xxvi) the
growth rate of sales, collected premiums, annuity deposits and
assets; (xxvii) interruption in telecommunication, information
technology or other operational systems or failure to maintain the
security, confidentiality or privacy of sensitive data on such
systems; (xxviii) events of terrorism, cyber attacks, natural
disasters or other catastrophic events, including losses from a
disease pandemic; (xxix) ineffectiveness of risk management
policies and procedures in identifying, monitoring and managing
risks; and (xxx) the risk factors or uncertainties listed from time
to time in our filings with the Securities and Exchange Commission.
Other factors and assumptions not identified above are also
relevant to the forward-looking statements, and if they prove
incorrect, could also cause actual results to differ materially
from those projected. All written or oral forward-looking
statements attributable to us are expressly qualified in their
entirety by the foregoing cautionary statements. Our
forward-looking statements speak only as of the date made. We
assume no obligation to update or to publicly announce the results
of any revisions to any of the forward-looking statements to
reflect actual results, future events or developments, changes in
assumptions or changes in other factors affecting the forward
looking statements.
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SOURCE CNO Financial Group, Inc.