Fairfax Announces Pricing of Senior Notes Offering
March 01 2021 - 5:22PM
Fairfax Financial Holdings Limited (“Fairfax”) (TSX: FFH and FFH.U)
announces that it has priced a private offering of US$600,000,000
of Fairfax’s Senior Notes due 2031 (the “Notes”) at an issue price
of 99.865%. The Notes will be unsecured obligations of Fairfax and
will pay a fixed rate of interest of 3.375% per annum. Fairfax also
intends to enter into a registration rights agreement in connection
with the offering.
Fairfax intends to use the net proceeds from
this offering to repay a portion of the indebtedness under its
unsecured revolving credit facility and other outstanding debt of
Fairfax and its subsidiaries. This may include the redemption or
repurchase of certain previously issued senior unsecured notes
and/or other debt securities of Fairfax and its subsidiaries.
Except as set forth above, as of the date hereof, Fairfax has not
made any determination as to the specific debt or other obligations
to be repaid, nor the amount, timing or method of repayment. Any
repurchase of senior unsecured notes and/or other debt securities
of Fairfax and its subsidiaries will be subject to market
conditions, and there can be no assurance that such note or
securities will be available for repurchase on terms acceptable to
Fairfax. The offering is expected to close on or about March 3,
2021, 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 engaged in property and casualty insurance and
reinsurance and the associated investment management.
For further information contact: John
Varnell, Vice President, Corporate Development at (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
refinance and/or repay certain of our outstanding debt or other
corporate obligations with the proceeds of the offering on terms
acceptable to us; a reduction in net earnings if our loss reserves
are insufficient; underwriting losses on the risks we insure that
are higher or lower 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 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 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.
Fairfax Financial (TSX:FFH)
Historical Stock Chart
From Aug 2024 to Sep 2024
Fairfax Financial (TSX:FFH)
Historical Stock Chart
From Sep 2023 to Sep 2024