- Free Writing Prospectus - Filing under Securities Act Rules 163/433 (FWP)
January 15 2010 - 6:03AM
Edgar (US Regulatory)
ISSUER FREE
WRITING PROSPECTUS
(RELATING TO PRELIMINARY PROSPECTUS
SUPPLEMENT DATED JANUARY 13, 2010 AND
PROSPECTUS DATED DECEMBER 18, 2008)
FILED PURSUANT TO RULE 433
REGISTRATION NUMBER
333-156284
DELPHI
FINANCIAL GROUP, INC.
$250,000,000 7.875% Senior Notes due 2020
Final
Term Sheet
Dated
January 14, 2010
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Issuer:
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Delphi Financial Group, Inc.
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Security Type:
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Senior Unsecured Fixed Rate Notes
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Principal Amount:
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$250,000,000
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Maturity Date:
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January 31, 2020
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Ratings (Moodys/ S&P/
Fitch)
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Baa3/ BBB /BBB-
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Pricing Date:
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January 14, 2010
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Settlement Date:
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January 20, 2010 (T+3)
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Coupon:
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7.875%
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Benchmark Treasury:
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3.375% due November 15, 2019
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Benchmark Treasury Yield:
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3.734%
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Benchmark Treasury Price:
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97-2
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Spread to Benchmark Treasury:
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+ 414.1 basis points
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Re-Offer Yield:
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7.875%
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Price to Public:
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99.995% of principal amount
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Interest Payment Dates:
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Semi-annually on January 31 and July 31, commencing
July 31, 2010
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Redemption Provisions:
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Make-whole call
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At any time at a discount rate of Treasury plus 50 basis
points
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Interest Rate Adjustment:
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If the rating on the notes from Moodys Investors Service,
Inc., which we refer to as Moodys, Standard &
Poors Ratings Services, a division of The McGraw-Hill
Companies, Inc., which we refer to as S&P, or Fitch
Ratings, which we refer to as Fitch, is a rating set forth in
the immediately following table, the per annum interest rate on
the notes will increase from that set forth herein by the
percentage set forth opposite that rating;
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however, for this purpose, only the two lowest of the rating
levels of Moodys, S&P and Fitch shall be taken into
account:
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Rating
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Rating Agency
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Levels
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Moodys
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S&P
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Fitch
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Percentage
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1
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Ba1
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BB+
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BB+
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0.25
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%
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2
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Ba2
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BB
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BB
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0.50
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%
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3
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Ba3
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BB-
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BB-
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0.75
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%
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4
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B1 or below
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B+ or below
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B+ or below
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1.00
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%
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If any of Moodys, S&P or Fitch subsequently increases
its rating with respect to the notes to or above any of the
threshold ratings set forth above, the per annum interest rate
on such notes will be decreased such that the per annum interest
rate equals the interest rate set forth herein plus the
percentages (if any) applicable to the lowest two ratings levels
of Moodys, S&P and Fitch in effect immediately
following the increase.
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Each adjustment required by any decrease or increase in a rating
set forth above, whether occasioned by the action of
Moodys, S&P or Fitch, shall be made independent of
any and all other adjustments. In no event shall (1) the
per annum interest rate on the notes be reduced below the
interest rate set forth herein, and (2) the total increase
in the per annum interest rate on the notes exceed 2.00% above
the interest rate set forth herein.
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If any two of Moodys, S&P or Fitch ceases to provide
a rating of the notes, any subsequent increase or decrease in
the interest rate of the notes necessitated by a reduction or
increase in the rating by the agency continuing to provide the
rating shall be twice the percentage set forth in the applicable
table above.
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No adjustments in the interest rate of the notes shall be made
solely as a result of Moodys, S&P or Fitch ceasing to
provide a rating. If all of Moodys, S&P and Fitch
cease to provide a rating of the notes, the interest rate on the
notes will increase to, or remain at, as the case may be, 2.00%
above the interest rate payable on the notes on the date of
their issuance.
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Any interest rate increase or decrease described above will take
effect from the first business day of the interest period during
which a rating change requires an adjustment in the interest
rate. If any of Moodys, S&P or Fitch changes its
rating of the notes more than once during any particular
interest period, the last such change to occur will control in
the event of a conflict.
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The interest rate on the notes will permanently cease to be
subject to any adjustment described above (notwithstanding any
subsequent decrease in the ratings by either or both rating
agencies) if the notes become rated A3, A- or A- or higher by
any two of Moodys, S&P and Fitch, respectively (or
one of these ratings if only rated by one rating agency), with a
stable or positive outlook by both such rating agencies.
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Effect of Interest Rate Contingency:
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In certain circumstances, if the rating on the notes changes, we
may be obligated to pay additional interest on the notes. Our
obligation to pay such additional interest may implicate the
provisions of the Treasury regulations relating to
contingent payment debt instruments. Under these
regulations, however, a contingency should not cause a debt
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instrument to be treated as a contingent payment debt instrument
if, as of the issue date, such contingency is
remote, incidental, or, in certain
circumstances, significantly more likely than not to occur. We
intend to take the position that the foregoing contingency
should not cause the notes to be contingent payment debt
instruments. Our position is binding on a holder, unless the
holder discloses in the proper manner to the IRS that it is
taking a different position. However, this determination is
inherently factual and we can give you no assurance that our
position would be sustained if challenged by the IRS. A
successful challenge of this position by the IRS would require a
holder to accrue interest income at a rate higher than the
stated interest rate on the notes, and would cause any gain from
the sale or other disposition of a note to be treated as
ordinary income, rather than capital gain. The discussion of
certain U.S. federal income tax considerations assumes that the
notes will not be considered contingent payment debt
instruments. Holders are urged to consult their own tax advisors
regarding the potential application of the contingent payment
debt regulations to the notes and the consequences thereof.
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Payment of Additional Amounts by a Foreign Successor Issuer:
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A Foreign Successor Issuer is any entity that is organized in
Bermuda, Canada, a European Union Member State or Switzerland
and becomes a successor of Delphi as a result of a merger of
Delphi with and into such entity after the date hereof in
accordance with the provisions set forth in the Preliminary
Prospectus Supplement Consolidation, Merger
and Sale of Assets.
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All payments made under or with respect to the notes by any
Foreign Successor Issuer will be made free and clear of and
without withholding or deduction for or on account of any
present or future tax, duty, levy, impost, assessment or other
governmental charge (including related penalties and interest)
of whatever nature (collectively, Taxes) imposed or
levied by or on behalf of any jurisdiction in which such Foreign
Successor Issuer is organized or resident for tax purposes or
from or through which such Foreign Successor Issuer makes any
payment on the notes or any department or political subdivision
thereof (each, a Relevant Taxing Jurisdiction),
unless such Foreign Successor Issuer is required by law to
withhold or deduct Taxes. If a Foreign Successor Issuer is
required by law to withhold or deduct any amount for or on
account of Taxes of a Relevant Taxing Jurisdiction from any
payment made under or with respect to the notes, the Foreign
Successor Issuer, subject to the exceptions listed below, will
pay additional amounts (Additional Amounts) as may
be necessary to ensure that the net amount received by each
holder of the notes after such withholding or deduction
(including withholding or deduction attributable to Additional
Amounts payable hereunder) will not be less than the amount the
holder would have received if such Taxes had not been withheld
or deducted.
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A Foreign Successor Issuer will not, however, pay Additional
Amounts to a holder or beneficial owner of notes:
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(a) to the extent the Taxes giving rise to such Additional
Amounts would not have been imposed but for any present or
former connection of the holder or beneficial owner with the
Relevant Taxing Jurisdiction (other than a connection resulting
solely from the ownership of notes);
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(b) to the extent the Taxes giving rise to such Additional
Amounts would not have been imposed but for the failure of the
holder or beneficial owner of notes, following the Foreign
Successor Issuers written request (or other applicable
withholding agents request) addressed to the holder, to
the extent such holder or beneficial owner is legally eligible
to do so, to comply with any certification, identification,
information or other reporting requirements, whether required by
statute, treaty, regulation or administrative practice of a
Relevant Taxing Jurisdiction, as a precondition to exemption
from, or reduction in the rate of deduction or withholding of,
Taxes imposed by the Relevant Taxing Jurisdiction (including,
without limitation, a certification that the holder or
beneficial owner is not resident in the Relevant Taxing
Jurisdiction);
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(c) with respect to any estate, inheritance, gift, sales,
use, transfer, value added, personal property, excise or any
similar Taxes;
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(d) if such holder of notes is a fiduciary or partnership
or person other than the sole beneficial owner of such payment,
to the extent the Taxes giving rise to such Additional Amounts
would not have been imposed on such payment had the holder been
the beneficiary, partner or sole beneficial owner, as the case
may be, of such note;
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(e) to the extent the Taxes giving rise to such Additional
Amounts would not have been imposed but for the presentation by
the holder of any note, where presentation is required, for
payment on a date more than 30 days after the date on which
payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
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(f) with respect to any withholding or deduction that is
imposed on a payment to an individual and that is required to be
made pursuant to the European Council Directive on the taxation
of savings income that was adopted by the ECOFIN Council on
June 3, 2003 or any law implementing or complying with, or
introduced in order to conform to, such directive (the EU
Savings Tax Directive) or is required to be made pursuant
to the Agreement between the European Community and the Swiss
Confederation dated October 26, 2004 providing for measures
equivalent to those laid down in the EU Savings Tax Directive
(the EU-Swiss Savings Tax Agreement) or any law or
other governmental regulation implementing or complying with, or
introduced in order to conform to, such agreements;
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(g) to the extent the Taxes giving rise to such Additional
Amounts would not have been imposed if the notes were presented
for payment in another jurisdiction within the European Union;
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(h) with respect to any Tax imposed by the United States,
any state thereof or the District of Columbia;
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(i) with respect to any Tax that is payable other than by
withholding or deduction at source; or
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(j) any combination of items (a), (b), (c), (d), (e), (f),
(g), (h), (i) and (j).
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A Foreign Successor Issuer will (i) make any such
withholding or deduction required by law to be made by such
Foreign Successor Issuer and (ii) remit the full amount
deducted or withheld to the relevant authority in accordance
with applicable law. The Foreign Successor Issuer will make
reasonable efforts to obtain certified copies of tax receipts
evidencing any payment by the Foreign Successor Issuer of any
Taxes so deducted or withheld from each Relevant Taxing
Jurisdiction imposing such Taxes. The Foreign Successor Issuer
will provide to the trustee, within a reasonable time after the
date the payment of any Taxes so deducted or withheld is due
pursuant to applicable law, either a certified copy of tax
receipts evidencing such payment, or, if such tax receipts are
not reasonably available to the Foreign Successor Issuer, such
other documentation that provides reasonable evidence of such
payment by the Foreign Successor Issuer.
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At least 30 calendar days prior to each date on which any
payment under or with respect to the notes is due and payable,
if the Foreign Successor Issuer will be obligated to pay
Additional Amounts with respect to such payment (unless such
obligation to pay Additional Amounts arises after the 40th day
prior to the date on which payment under or with respect to the
notes is due and payable, in which case it will be promptly
thereafter), the Foreign Successor Issuer will deliver to the
trustee an officers certificate stating that such
Additional Amounts will be payable and the amounts so payable
and will set forth such other information necessary to enable
the trustee to pay such Additional Amounts to holders of the
notes on the payment date. The Foreign Successor Issuer will
promptly publish a notice in accordance with the provisions set
forth in the indenture stating that such Additional Amounts will
be payable and describing the obligation to pay such amounts.
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The obligations described under this heading will survive any
termination, defeasance or discharge of the indenture and will
apply
mutatis mutandis
to any successor to any Foreign
Successor Issuer which successor is organized in Bermuda,
Canada, a European Union Member State or Switzerland, or to any
jurisdiction in which such successor is organized or is resident
for tax purposes or any jurisdiction from or through which
payment is made by such successor or its respective agents.
Whenever the indenture or the Preliminary Prospectus
Supplement Description of Notes refers
to, in any context, the payment of principal, premium, if any,
interest or any other amount payable under or with respect to
any note, such reference includes the payment of Additional
Amounts as described hereunder, if applicable.
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Tax Redemption:
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If, as a result of:
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(a) any amendment to, or change in, the laws or treaties
(or regulations or rulings promulgated thereunder) of any
Relevant Taxing Jurisdiction which is announced and becomes
effective after the date on which a Foreign Successor Issuer
becomes a Foreign Successor Issuer (or, where a jurisdiction in
question does not become a Relevant Taxing Jurisdiction until a
later date, such later date); or
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(b) any amendment to, or change in, the official
application or official interpretation of the laws, treaties,
regulations or rulings of any Relevant Taxing Jurisdiction which
is announced and becomes effective after the date on which a
Foreign Successor Issuer becomes a Foreign Successor Issuer (or,
where a jurisdiction in question does not become a Relevant
Taxing Jurisdiction until a later date, such later date),
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such Foreign Successor Issuer would be obligated to pay, on the
next date for any payment and as a result of that amendment or
change, Additional Amounts as described above under
Payment of Additional Amounts by a Foreign
Successor Issuer with respect to the Relevant Taxing
Jurisdiction, which such Foreign Successor Issuer reasonably
determines it cannot avoid by the use of reasonable measures
available to it, then such Foreign Successor Issuer may redeem
all, but not less than all, of the notes, at any time
thereafter, upon not less than 30 nor more than
60 days notice, at a redemption price of 100% of
their principal amount, plus accrued and unpaid interest, if
any, to the redemption date. Prior to the giving of any notice
of redemption described in this paragraph, a Foreign Successor
Issuer will deliver to the trustee:
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(a) a certificate signed by an officer of such Foreign
Successor Issuer stating that the obligation to pay the
Additional Amounts cannot be avoided by such Foreign Successor
Issuers taking reasonable measures available to it; and
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(b) a written opinion of independent legal counsel to such
Foreign Successor Issuer of recognized standing to the effect
that such Foreign Successor Issuer has or will become obligated
to pay such Additional Amounts as a result of a change,
amendment, official interpretation or application described
above.
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A Foreign Successor Issuer will publish a notice of any optional
redemption of the notes described above in accordance with the
provisions of the indenture described in the Preliminary
Prospectus Supplement under Description of
Notes Redemption of Notes at Our Option. No
such notice of redemption may be given more than 60 days
before the Foreign Successor Issuer first becomes liable to pay
any Additional Amounts.
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Risk Factor:
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Downgrades or other changes in our credit ratings could
affect our financial results and reduce the market value of the
notes.
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The interest rate payable on the notes will be subject to
adjustment from time to time if any rating agency, downgrades
the credit rating assigned to the notes as described above. We
can give no assurance, however, that such adjustment will fully
compensate you for any loss in value of the notes as a result of
any ratings downgrade.
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CUSIP / ISIN:
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247131 AF2 / US247131AF28
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Denominations:
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$2,000 and integral multiples of $1,000 in excess thereof
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Joint Book-Running Managers:
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Banc of America Securities LLC
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Wells Fargo Securities, LLC
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Joint Lead Managers:
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J.P. Morgan Securities Inc.
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U.S. Bancorp Investments, Inc.
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Senior Co-Manager:
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KeyBanc Capital Markets Inc.
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Co-Managers:
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SG Americas Securities, LLC
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The Williams Capital Group, L.P.
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*
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A credit rating is not a recommendation to buy, sell or hold the
securities and may be subject to revision or withdrawn at any
time by the assigning rating agency. Each credit rating should
be evaluated independently of any other credit rating. Any
rating assigned to the notes does not enhance, affect or address
the likely performance of the notes other than the ability of
the Issuer to meet its obligations.
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The issuer has filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information
about the issuer and this offering. You may get these documents
for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, you may obtain a copy of the prospectus by
calling toll-free
1-800-294-1322
at Banc of America Securities LLC or
1-800-326-5897
at Wells Fargo Securities, LLC.
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