Ohio Casualty starts exchange for 5% convertibles, plans redemption

New York, Feb. 22 - Ohio Casualty Corp. said it has begun an exchange offer for its $184.25 million of 5% convertible notes due 2022.

The company is offering an equal principal amount of new notes with similar terms except that they will have net share settlement.

Ohio Casualty is offering a fee of 0.35% of the principal amount of notes exchanged.

Under net share settlement, the Fairfield, Ohio, property and casualty insurer will pay cash up to the principal amount and stock for the remainder in the event of a conversion.

Ohio Casualty also said it plans to redeem all or part of the new and old notes after completing the exchange. It said it believes the net share settlement feature will allow it to redeem the notes in "the most economical manner."

The exchange runs through midnight ET on March 21.

The information agent is MacKenzie Partners, Inc. (call collect 212 929-5500 or 800 322-2885).

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