Travelers tenders for 6.25% notes, seeks OK from 6.75% noteholders

By Susanna Moon

Chicago, Oct. 27 - Travelers Cos., Inc. said it began an offer to purchase for cash its $1 billion in outstanding 6.25% fixed- to floating-rate junior subordinated debentures due 2067 at $1,050 per $1,000 principal amount plus accrued interest.

To do this, the company must get consents from holders of its 6.75% senior notes due 2036. The terms of these notes prohibit Travelers from repaying, redeeming or repurchasing the subordinated debentures before March 15, 2047 unless it sells stock or other equity to do so.

The termination of the replacement capital covenant requires the consent of a majority of the holders of the covered debt and is a condition to the tender offer.

The tender offer will run until 5 p.m. ET on Nov. 5.

In consideration for the consents, Travelers will pay $5 in cash per $1,000 principal amount of 6.75% notes.

The consent solicitation will expire at 5 p.m. ET on Nov. 4 and is not conditioned on the completion of the tender offer.

Bank of America Merrill Lynch (866 292-0070 or collect 980 683-3215) is the solicitation agent for the consent solicitation and the dealer manager for the tender offer. Global Bondholder Services Corp. (866 857-2200) is the information agent.

Travelers is a holding company for insurance subsidiaries and is based in New York.

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