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American Financial calls senior convertibles
By Jennifer Chiou
New York, April 14 - American Financial Group, Inc. announced the upcoming redemption of its senior convertible notes due June 2, 2033.
For each $1,000 principal amount at maturity, the company said that it will redeem the notes at $371.53 plus accrued interest of $7.43.
The redemption date is June 2.
If all of the notes were redeemed, the redemption amount, including interest, would be $193.5 million.
As already announced, the notes are convertible into 17.2524 common shares per $1,000 principal amount at maturity, which is equal to a conversion price of $25.84 per share.
As allowed under the note indenture, the company previously said that it intends to pay cash instead of shares for converted notes, as it did throughout 2007, but may elect to pay some amounts in stock. The amount of cash to be paid will equal 17.2524 times the average closing sale price of the common stock for the five consecutive trading days following the conversion date for each holder.
Based on the April 11 closing price of $25.66, the number of American Financial shares would have a market value of $442.70. As a result, the company said it anticipates that virtually all of the notes will be presented for conversion.
For each $1,000 principal amount at maturity of notes that are converted before the close of business on May 29, American Financial said it will pay $371.53 in cash in lieu of common stock and shares of company stock in excess of $371.53 up to the value of 17.2524 shares.
The company noted that it intends to use cash on hand and borrowings under its bank credit facility to fund the cash payments to be made upon conversion and/or redemption of the notes.
The conversion agent is Corporate Trust Services (call 651 495-3520 or fax 651 495-8158). The paying agent for the redemption is U.S. Bank (800 934-6802).
American Financial is a Cincinnati-based property and casualty insurer.
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