By Ronda Fears
Nashville, Tenn., Dec. 13 - Reinsurance Group of America Inc. sold $225 million of 49-year mandatory convertible trust preferreds at par of 50 to yield 5.75% with a 23% initial conversion premium. Banc of America Securities and Lehman Brothers were joint book-running lead managers of the deal, which sold at the cheap end of price talk that put the yield between 5.25% and 5.75% yield and the premium in a range of 23% to 27%.
Reinsurance Group also sold $200 million of 10-year 6.75% notes at 99.922 for a yield of 6.761%, or a spread of 175 basis points over treasuries. The company plans to use proceeds to repay $140 million bank revolver and $75 million term loan from a unit of MetLife.
Terms of the new deal are:
Issuer: Reinsurance Group of America Inc.
Amount: $225 million
Greenshoe: $33.75 million
Lead Managers: Banc of America Securities and Lehman Brothers
Maturity Date: March 18, 2051
Dividend: 5.75%
Issue Price: par, $50
Yield-to-maturity: 5.75%
Conversion Premium: 23%
Conversion Price: $39.98
Conversion Ratio: 1.25
Call: non-callable for three years, thereafter with 120% hurdle
Rating(s): Moody's: Baa1
| S&P: BBB
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| Settlement Date: | Dec. 18
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