Arch Capital adjusts redemption terms for 5.031%, 4.011% senior notes

By Sarah Lizee

Olympia, Wash., May 15 – Arch Capital Group Ltd. and wholly owned subsidiary Arch Capital Finance LLC entered into a second supplemental indenture on Thursday relating to the $500 million of 4.011% senior notes due 2026 and $450 million of 5.031% senior notes due 2046, according to an 8-K filing with the Securities and Exchange Commission.

The indenture originally provided that the notes are redeemable at any time at the option of Arch Capital Finance at a redemption price equal to a make-whole premium or, following the par call date of Sept. 15, 2026 in the case of the 2026 notes and June 15, 2046 in the case of the 2046 notes, at par plus, in each case, accrued interest.

The second supplemental indenture limits the optional redemption right to provide that the notes are not redeemable at the option of Arch Finance on or before Dec. 8, 2021, except in limited circumstances.

This change is intended to permit the notes to qualify as tier 3 ancillary capital under eligible capital requirements of the Bermuda Monetary Authority, the filing said.

Arch said that because the amendment does not materially adversely affect the interests of the holders of notes, the second supplemental indenture was entered into without their consent.

The Bank of New York Mellon is the trustee.

Arch Capital is an insurance, reinsurance and mortgage insurance provider based in Hamilton, Bermuda.

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