AIG wraps tender offers, consent solicitations for SunAmerica notes

Chicago, July 1 – American International Group, Inc. has ended the tender offers and consent solicitations for notes originally issued by American General Corp. and SunAmerica Inc., with the final expiration time at 5 p.m. ET on June 30, according to a press release.

After the early deadline, the company received tenders for the following amounts of notes:

• None of the $31,465,000 outstanding of 7.57% junior subordinated deferrable interest debentures, series A, (Cusip: 00138GAB5) issued by American General priced using the 1.875% U.S. Treasury due Feb. 15, 2051 plus 175 basis points for a total consideration of $1,540.72;

• None of the $141,985,000 outstanding of 8.125% junior subordinated deferrable interest debentures, series B, (Cusip: 00138GAC3) issued by American General priced using the 1.875% U.S. Treasury due Feb. 15, 2051 plus 175 bps for a total consideration of $1,630.56;

• $217,000 of the $101,465,000 outstanding of 7.5% notes due 2025 issued by American General (Cusip: 026351AU0) priced using the 0.75% U.S. Treasury due April 30, 2026 plus 45 bps for a total consideration of $1,250.83;

• $276,000 of the $99,303,000 outstanding of 6.625% notes due 2029 issued by American General (Cusip: 026351AZ9) priced using the 1.25% U.S. Treasury due Feb. 15, 2031 plus 65 bps for a total consideration of $1,308.06;

• $29,000 of the $54,866,000 outstanding of 8.5% junior subordinated debentures due 2030 (Cusip: 00138GAA7) issued by American General priced using the 1.125% U.S. Treasury due Feb. 15, 2031 plus 150 bps for a total consideration of $1,424.77;

• $6,735,000 of the $68,585,000 outstanding of 8.125% debentures due April 28, 2023 (Cusip: 866930AB6) issued by SunAmerica priced using the 0.125% U.S. Treasury due April 30, 2023 plus 0 bps for a total consideration of $1,152.95;

• $520,000 of the $12,533,000 outstanding of 7.05% notes due 2025 issued by SunAmerica (Cusip: 86703QBJ9) priced using the 0.75% U.S. Treasury due April 30, 2026 plus 40 bps for a total consideration of $1,255.44;

• $420,000 of the $8,299,000 outstanding of 7% notes due 2026 issued by SunAmerica (Cusip: 86703QBN0) priced using the 0.75% U.S. Treasury due April 30, 2026 plus 45 bps for a total consideration of $1,262.08 (originally published as $1,262.03 by AIG); and

• $43,000 of the $2,167,000 outstanding of 5.6% debentures due 2097 issued by SunAmerica (Cusip: 866930AG5) priced using the 1.875% U.S. Treasury due Feb. 15, 2051 plus 170 bps for a total consideration of $1,375.60.

The total considerations include an early tender payment of $30 per $1,000 principal amount. The early tender payment of $30 includes a $5 consent fee for the series that involve consents, as described below.

Interest will also be paid to the settlement date.

Consent solicitations

For all series of notes (listed above) except for the 7.5% notes due 2025, the 6.625% notes due 2029 and the 8.5% debentures due 2030 originally issued by American General, AIG was soliciting consents. Sufficient consents had been received early for the series A and the series B notes.

The company had further extended the deadline for just the SunAmerica notes to 5 p.m. ET on June 30 from 11:59 p.m. ET on June 22.

The consent solicitation time had been previously extended for the series A notes and the SunAmerica notes until 11:59 p.m. ET on June 15 and prior to that until 11:59 p.m. ET on June 8.

As of the extended deadline, sufficient consents were received for the series A notes.

AIG announced that it had received sufficient consents as of the early deadline for the series B notes of AIG Life Holdings.

The background of the consent solicitations and the tender offers is that the notes were issued by legacy life and retirement companies prior to these companies being acquired by AIG in the late 1990s and early 2000s. As a result of these acquisitions, this debt was either assumed (in the case of the SunAmerica notes) or guaranteed (in the case of the notes originally issued by American General Corp.) by AIG.

As AIG pursues a separation of its life and retirement business, the tender offers and consent solicitations are intended to retire some or all of this legacy debt and conform the covenants governing any such debt not tendered so they are in line with covenants governing other existing AIG-issued debt.

AIG needs holders representing a majority of the notes of each series to effect the proposed amendments.

AIG announced a change to the original terms of the consent solicitation in the press release on Thursday, noting that it would no longer pay a consent payment of $5 per $1,000 note to holders who delivered standalone consents without tendering their notes. Earlier, it was designed that the company would pay the fee.

For tendering noteholders, the $5 consent fee is part of the $30 early tender payment. Tendering noteholders also had to consent.

Details

The early tender deadline was 5 p.m. ET on May 24, also the original consent expiration time.

Pricing was set at 2 p.m. ET on May 24.

On the early settlement date of May 26, AIG purchased $253,596,000 principal amount of notes that were tendered by the early tender deadline.

Final settlement will take place on July 1.

Credit Suisse Securities (USA) LLC (800 820-1653, 212 538-2147) and J.P. Morgan (866 834-4666, 212 834-4045) are the dealer managers and consent solicitation agents.

D.F. King, & Co. Inc. (800 334-0384, 212 269-5550, aig@dfking.com) is the tender and information agent.

AIG is a New York-based insurance provider.

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