Mutual of Omaha Insurance tenders for up to $300 million surplus notes

By Jennifer Chiou

New York, June 27 – Mutual of Omaha Insurance Co. announced the start of its cash tender offer for its $296.88 million of outstanding 6.8% surplus notes due 2036 and its $300 million of 6.95% surplus notes due 2040.

There is a tender cap of $300 million.

According to a press release, the 6.8% notes have a first-priority status, while the 6.95% notes are second priority.

The offer will end at 11:59 p.m. ET on July 25.

For each $1,000 principal amount, the company will set the purchase price using the 3.625% Treasury due Feb. 15, 2044 plus a spread of 125 bps for the 6.8% notes and the 3.625% Treasury due Feb. 15, 2044 plus a spread of 130 bps for the 6.95% notes., both including an early tender payment of $50.00 for those who participate prior to 5 p.m. ET on July 11.

Mutual of Omaha said it will also pay accrued interest.

Early settlement is anticipated for July 17.

If pricing were set on June 26, the full tender consideration would be $1,303.46 for the 6.8% notes and $1,348.56 for the 6.95% notes.

The 6.8% notes will be accepted before the other series, which may be accepted on a prorated basis, the release stated.

Goldman, Sachs & Co. (800 828-3182 or call collect 212 902-5183) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) are the dealer managers. D.F. King & Co., Inc. is the tender agent and information agent (800 967-5079).

The insurance and financial services provider is based in Omaha.

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