As filed with the Securities and Exchange Commission on November 27, 2023.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
F&G Annuities & Life, Inc.
(Exact name of registrant as specified in its charter)
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| Delaware | 6311 | 85-2487422 |
(State or other jurisdiction of
incorporation or organization) | (Primary Standard Industrial Classification Code
Number) | (I.R.S. Employer
Identification Number) |
801 Grand Avenue, Suite 2600
Des Moines, Iowa 50309
(515) 330-3340
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Jodi Ahlman
F&G Annuities & Life, Inc.
801 Grand Avenue, Suite 2600
Des Moines, Iowa 50309
(515) 330-3340
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
| | | | | |
Dwight S. Yoo
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001
(212) 735-3000 | Jeffrey J. Delaney Stephanie J. Langan Pillsbury Winthrop Shaw Pittman LLP 31 W. 52nd St. New York, New York 10019 (212) 858-1000 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☐ |
| | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. o
TABLE OF ADDITIONAL REGISTRANTS
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Exact name of registrant as specified in its charter* | | State or other
jurisdiction of
incorporation or
organization | | Primary Standard
Industrial
Classification Code
Number | | I.R.S. Employer
Identification
Number |
CF Bermuda Holdings Limited | | Bermuda | | 6311 | | |
FGL US Holdings Inc. | | Delaware | | 6311 | | 82-2796563 |
Fidelity & Guaranty Life Business Services, Inc. | | Delaware | | 6311 | | 43-1914674 |
Fidelity & Guaranty Life Holdings, Inc. | | Delaware | | 6311 | | 48-1245662 |
__________________
*The address and telephone number of each additional registrant is c/o F&G Annuities & Life, Inc., 801 Grand Avenue, Suite 2600, Des Moines, Iowa 50309, tel. (515) 330-3340.
The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion, dated November 27, 2023
PRELIMINARY PROSPECTUS
$250,000,000
F&G Annuities & Life, Inc.
% Senior Notes due 2053
We are offering $250,000,000 aggregate principal amount of our % senior notes due 2053 (the “notes”). We will pay interest on the notes quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning on March 15, 2024. The interest rate payable on the notes will be subject to adjustment from time to time if either credit rating assigned to the notes is downgraded (or is downgraded and subsequently upgraded), as described under “Description of the Notes—Interest Rate Adjustment upon Ratings Action.” The notes will mature on December 15, 2053.
The notes will be fully and unconditionally guaranteed on a senior unsecured, unsubordinated basis, jointly and severally, by each of our existing and future direct and indirect subsidiaries that are guarantors of our obligations under the Credit Agreement (as defined herein).
The notes and the guarantees (as defined herein) will be our and the guarantors’ (as defined herein) senior unsecured obligations, ranking senior in right of payment to all of our and the guarantors’ obligations that are expressly subordinated in right of payment to the notes and each guarantee, equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness, including our and the guarantors’ obligations under the 2028 Senior Notes (as defined herein), the Credit Agreement, the FGLH 2025 Senior Notes (as defined herein) and the FNF Credit Agreement (as defined herein), as applicable, and effectively junior in right of payment to any of our or the guarantors’ future secured indebtedness to the extent of the value of the assets securing such indebtedness. The notes and the guarantees will be structurally subordinated to the indebtedness, other liabilities (including liabilities to policyholders and contract holders) and preferred equity of our and the guarantors’ subsidiaries that are not guarantors.
Except as described in this prospectus, the notes may not be redeemed by us prior to December 15, 2028. We may redeem the notes, in whole or in part, at any time and from time to time on and after December 15, 2028 at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date. If we experience a Change of Control and a Below Investment Grade Rating Event (each as defined herein), as described under “Description of the Notes—Repurchase upon Change of Control Triggering Event,” we will be required to offer to repurchase the notes from the holders thereof on the terms described in this prospectus.
The notes will be issued in minimum denominations of $25 and integral multiples of $25 in excess thereof. We intend to apply to list the notes on The New York Stock Exchange (the “NYSE”) under the symbol “FGN,” and if the application is approved, we expect trading in the Notes on the NYSE to begin within 30 days of the original issue date. The notes are expected to trade “flat,” which means that purchasers will not pay, and sellers will not receive, any accrued and unpaid interest on the notes that is not reflected in the trading price. Currently, there is no public market for the notes.
Investing in the notes involves risks. See “Risk Factors” beginning on page 13 of this prospectus and in the documents incorporated by reference herein. Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission or regulatory authority has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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| Per Note | | Total |
Public offering price(1) | % | | $ |
Underwriting discount(2) | % | | $ |
Proceeds to the Issuer before expenses(2) | % | | $ |
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(1)Plus accrued interest, if any, from , 2023, if settlement occurs after that date.
(2)Reflects $ aggregate principal amount of notes sold to retail investors, for which the underwriters received an underwriting discount of $ (or %) per note, and $ aggregate principal amount of notes sold to institutional investors, for which the underwriters received an underwriting discount of $ (or %) per note. The underwriting discount per note reflected in the table above is calculated using a weighted average underwriting discount for retail and institutional investors. See “Underwriting (Conflicts of Interests)” for more information.
The underwriters may also purchase up to an additional $37,500,000 aggregate principal amount of the notes offered hereby, within 30 days of the date of this prospectus, to cover overallotments. If the underwriters exercise this overallotment option in full, the total public offering price, the total underwriting discount and the total aggregate proceeds to us, before expenses, will be $ , $ and $ , respectively.
The underwriters expect to deliver the notes to purchasers in book-entry form only through the facilities of The Depository Trust Company (“DTC”) and its participants, including Clearstream Banking, société anonyme (“Clearstream”) and Euroclear Bank S.A./N.V., as operator of the Euroclear system (“Euroclear”), on or about , 2023.
Joint Book-Running Managers
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Wells Fargo Securities | BofA Securities | Morgan Stanley | RBC Capital Markets | UBS Investment Bank |
The date of this prospectus is , 2023.
TABLE OF CONTENTS
We and the underwriters have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus or any free writing prospectus. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information others may give you.
Neither we nor the underwriters are offering to sell the notes in any jurisdiction where the offer or sale is not permitted.
You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date on the front cover of this prospectus or that the information incorporated by reference in this prospectus is accurate as of any date other than the date of the document containing the incorporated information. Neither the delivery of this prospectus nor any sale made hereunder shall under any circumstances imply that the information herein is correct as of any date subsequent to the date on the cover of this prospectus. Our business, financial condition, liquidity, results of operations and prospects may have changed since that date.
PROSPECTUS SUMMARY
This summary highlights selected information appearing elsewhere in, or incorporated by reference into, this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in the notes. You should carefully read the entire prospectus, including the section entitled “Risk Factors,” along with the financial data and related notes and the other documents that we incorporate by reference into this prospectus. We are a “controlled company” under the NYSE corporate governance standards and, as a result, rely on exemptions from certain corporate governance requirements.
All references to the “Company,” “F&G,” “we,” “our” and “us,” unless the context otherwise requires, are to F&G Annuities & Life, Inc., a Delaware corporation, and its consolidated subsidiaries, and all references to the “Issuer” are only to F&G Annuities & Life, Inc.
Our Company
Founded in 1959, we are a leading provider of insurance solutions serving retail annuity and life customers, as well as institutional clients. Our mission is to help people turn their aspirations into reality.
Through our insurance subsidiaries, including Fidelity & Guaranty Life Insurance Company (“FGL Insurance”) and Fidelity & Guaranty Life Insurance Company of New York (“FGL NY Insurance”), we market a broad portfolio of annuities, including fixed indexed annuities and multi-year guarantee annuities, pension risk transfer solutions, as well as indexed universal life insurance and institutional funding agreements.
Recent Developments
On November 13, 2023, Fidelity National Financial, Inc. (“FNF”) and we each announced our intent to enter into an agreement under which FNF will make an investment of approximately $250 million in F&G.
The net proceeds from the investment will be used to support the growth of assets under management (“AUM”).
Each of FNF’s Board of Directors and our Board of Directors has formed a special committee comprised of independent members of its Board (each, a “special committee”) to begin evaluation and negotiation of terms for the investment. Each of FNF’s special committee and our special committee will retain its own independent financial advisor, as well as legal counsel. Each special committee, consistent with its fiduciary duties and in consultation with its own independent financial and legal advisors, will thoroughly evaluate the terms and conditions of the investment on an arm’s length basis.
The transaction is expected to close in late 2023 or early 2024, subject to customary closing conditions. We cannot predict whether the transaction will take place or, if it does, the specific timing and terms thereof.
Corporate Information
Our principal executive office is located at 801 Grand Avenue, Suite 2600, Des Moines, Iowa 50309, and our telephone number is (515) 330-3340.
The following structure chart illustrates our corporate structure and indicates the Issuer and the guarantors of the notes. The structure chart is a summary only and does not present all of our operations or subsidiaries, including certain of our non-guarantor insurance subsidiaries.
Trademarks, Service Marks and Copyrights
We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and website names and addresses are our service marks or trademarks. Other trademarks, service marks and trade names appearing in this prospectus, and the information incorporated by reference herein, are the property of their respective owners. We also own or have the rights to copyrights that protect the content of our products. Solely for convenience, the trademarks, service marks, tradenames and copyrights referred to or incorporated by reference in this prospectus are listed without the ©, ® and TM symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.
SUMMARY OF THE OFFERING
The following summary contains basic information about the notes and is not intended to be complete. It does not contain all the information that is important to you. For a more detailed description of the notes, see “Description of the Notes.”
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Issuer | | F&G Annuities & Life, Inc. |
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Notes Offered | | $250,000,000 aggregate principal amount of % senior notes due 2053. |
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Overallotment Option | | The underwriters may also purchase from us up to an additional $37,500,000 aggregate principal amount of notes to cover overallotments, if any, within 30 days of the date of this prospectus. |
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Listing | | We intend to apply to list the notes on the NYSE under the symbol “FGN,” and if the application is approved, we expect trading in the notes on the NYSE to begin within 30 days of the original issue date. |
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Offering Price | | % of the principal amount of the notes. |
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Maturity Date | | The notes will mature on December 15, 2053. |
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Interest Rate and Payment Dates | | Interest of % per annum on the principal amount of the notes will be payable in arrears on March 15, June 15, September 15 and December 15 of each year, commencing on March 15, 2024. Interest will accrue on the notes from , 2023. |
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Interest Rate Adjustment | | The interest rate payable on the notes will be subject to adjustment from time to time if either S&P or Fitch (or a substitute rating agency therefor) downgrades (or downgrades and subsequently upgrades) the credit ratings assigned to the notes. See “Description of the Notes—Interest Rate Adjustment upon Ratings Action.” |
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Ranking | | The notes and the guarantees will be the senior unsecured obligations of the Issuer and the guarantors and will rank senior in right of payment to all obligations of the Issuer and the guarantors that are expressly subordinated in right of payment to the notes and each guarantee and equally in right of payment with all of the existing and future senior unsecured indebtedness of the Issuer and the guarantors, including the Issuer’s and the guarantors’ obligations under the 2028 Senior Notes, the Credit Agreement, the FGLH 2025 Senior Notes and the FNF Credit Agreement, as applicable (each as described in “Description of Other Indebtedness”). In addition, the notes and guarantees will effectively rank junior in right of payment to any future secured indebtedness of the Issuer and the guarantors to the extent of the value of the assets securing such indebtedness. As of September 30, 2023, the Issuer and the guarantors had no secured indebtedness that would have effectively ranked senior in right of payment to the notes and the guarantees, $1.6 billion of unsecured indebtedness that would have ranked equally in right of payment with the notes and the guarantees and no subordinated indebtedness that would have ranked junior in right of payment to the notes and the guarantees. See “Description of Other Indebtedness” for a detailed description of indebtedness of the Issuer and its subsidiaries. |
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Structural Subordination | | The Issuer is a holding company and conducts substantially all of its operations through its subsidiaries, including FGL Insurance and FGL NY Insurance. As a result, claims of the holders of the notes and the guarantees will be structurally subordinated to the indebtedness, other liabilities (including liabilities to policyholders and contract holders) and preferred equity of the Issuer’s and the guarantors’ subsidiaries that are not guarantors. Therefore, in the event of the bankruptcy, insolvency, liquidation or dissolution of a subsidiary that is not a guarantor, following payment by such subsidiary of its liabilities, such subsidiary may not have sufficient assets remaining in order to make payments to the Issuer, as a shareholder or otherwise. In addition, assets of the Issuer could be made available to satisfy claims of FGL Insurance’s policyholders, as discussed under “Risk Factors—Risk Factors Related to this Offering and the Notes—We are subject to statutory provisions under which our assets could be used to satisfy claims of FGL Insurance’s policyholders.” As of September 30, 2023, our non-guarantor subsidiaries had no aggregate indebtedness, and our insurance subsidiaries had $52.1 billion in aggregate liabilities to policyholders and contract holders, which would have effectively ranked senior to the notes and the guarantees. |
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Guarantees | | The payment of the principal of, and premium, if any, and interest on, the notes will be fully and unconditionally guaranteed on a senior unsecured, unsubordinated basis, jointly and severally, by each of the Issuer’s existing and future direct and indirect subsidiaries that are guarantors of the Issuer’s obligations under the Credit Agreement. As of the issue date of the notes, the only guarantors of the notes will be CF Bermuda Holdings Limited (“CF Bermuda”), FGL US Holdings Inc. (“FGL US Holdings”), Fidelity & Guaranty Life Business Services, Inc. (“FGLBS”) and Fidelity & Guaranty Life Holdings, Inc. (“FGLH”). See “Description of Other Indebtedness—Revolving Credit Agreement.” Any subsidiary that guarantees the Issuer’s obligations under the Credit Agreement after the date of the indenture will be required to become a guarantor under the indenture. See “Description of the Notes—General Terms of the Guarantees.” None of the Issuer’s insurance subsidiaries will guarantee the notes. In the future, the guarantees may be released or terminated under certain circumstances. For example, the guarantee of any guarantor will be released in the event such guarantor’s guarantee under the Credit Agreement is released or discharged. See “Description of the Notes—General Terms of the Guarantees” and “Description of the Notes—Additional Guarantees.” |
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Covenants | | The indenture (as defined below) contains various covenants by which the Issuer and its subsidiaries will be bound, including limitations on consolidations and mergers, limitations on liens on the capital stock of the Issuer’s Covered Subsidiaries (as defined under “Description of the Notes—Certain Covenants of the Issuer—Certain Definitions”) and limitations on the disposition of the capital stock of these Covered Subsidiaries in specified circumstances. These covenants are subject to important qualifications and limitations. See “Description of the Notes—Certain Covenants of the Issuer.” |
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Optional Redemption | | Except as described under “Description of the Notes—Tax Event Redemption,” the notes may not be redeemed by us, at our option, prior to December 15, 2028 (the “Par Call Date”). We may redeem the notes, in whole or in part, at any time and from time to time on and after the Par Call Date at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date. See “Description of the Notes—Optional Redemption.” |
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Tax Event Redemption | | We may redeem the notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest thereon to, but excluding, the redemption date, and all additional amounts, in certain circumstances where any foreign guarantor (as defined under “Description of the Notes—Certain Definitions”) would be required to pay additional amounts under the notes. See “Description of the Notes—Tax Event Redemption.” |
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Additional Amounts | | If a tax withholding or deduction is imposed on the payment of a foreign guarantor due under the notes or its guarantee, such foreign guarantor will be obligated to pay an additional amount such that the net amounts received in respect of such foreign guarantor’s payment is equal to the amount that would have been due in the absence of such tax withholding or deduction. See “Description of the Notes—Additional Amounts.” |
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Change of Control Offer | | If a Change of Control Triggering Event with respect to the notes occurs, each holder of such notes will have the right to require the Issuer to repurchase all or, at the holder’s option, any part of such holder’s notes at a repurchase price equal to 101% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest thereon to, but excluding, the repurchase date. See “Description of the Notes—Repurchase upon Change of Control Triggering Event.” |
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Use of Proceeds | | We estimate that the net proceeds from the sale of the notes in this offering will be approximately $ (or approximately $ if the underwriters fully exercise their overallotment option), after deducting the underwriting discount and estimated offering expenses payable by us. We anticipate using the net proceeds from the sale of the notes to repay borrowings under the Credit Agreement and for general corporate purposes, including the support of organic growth opportunities. See “Use of Proceeds.” |
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Conflicts of Interest | | To the extent that any underwriter, together with its affiliates, receives more than 5% of the net proceeds of this offering, not including the underwriting discount, such underwriter would be considered to have a “conflict of interest” with respect to this offering pursuant to Rule 5121 of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Pursuant to FINRA Rule 5121, the appointment of a qualified independent underwriter is not necessary in connection with this offering. See “Underwriting (Conflicts of Interest)—Conflicts of Interest.” |
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Further Issuances | | We may issue additional notes having the same terms, with certain exceptions, as the notes offered hereby; provided that if the additional notes are not fungible with the original notes offered hereby for U.S. federal income tax purposes, the additional notes will have a separate CUSIP number so that they are distinguishable from the notes offered hereby. |
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Absence of Public Market for the Notes | | The notes are a new issue of securities, and there is currently no established trading market for the notes. We intend to apply to list the notes on the NYSE under the symbol “FGN,” and if the application is approved, we expect trading in the notes on the NYSE to begin within 30 days of the original issue date. The notes are expected to trade “flat,” which means that purchasers will not pay, and sellers will not receive, any accrued and unpaid interest on the notes that is not reflected in the trading price. Certain of the underwriters have advised us that they currently intend to make a market in the notes. However, they are not obligated to do so, and any market making with respect to the notes may be discontinued without notice. Accordingly, we cannot assure you as to the development or liquidity of any trading market for the notes. See “Risk Factors—Risk Factors Related to this Offering and the Notes—There is currently no market for the notes, and we cannot assure you that an active trading market for the notes will develop. The notes may trade at prices below the price you paid for them.” |
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Indenture | | The notes will be issued under an indenture, dated as of January 13, 2023, among the Issuer, the guarantors and Citibank, N.A., as trustee, as previously amended and supplemented and to be amended and supplemented by a supplemental indenture thereto establishing the terms of the notes to be dated as of the issue date of the notes (collectively, the “indenture”). |
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Clearance and Settlement | | The notes will be issued in book-entry form through the facilities of DTC for the accounts of its participants, including Clearstream and Euroclear, and will trade in DTC’s same day funds settlement system. Beneficial interests in notes held in book-entry form will not be entitled to receive physical delivery of certificated notes, except in certain limited circumstances. |
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Form and Denomination | | The notes will be issued only in fully registered form without interest coupons in denominations of $25 and integral multiples of $25 in excess thereof. |
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Trustee and Paying Agent | | Citibank, N.A. |
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Governing Law | | The indenture and the notes will be governed by the laws of the State of New York. |
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Risk Factors | | Investment in the notes involves risk. See “Risk Factors” beginning on page 13 of this prospectus, the sections of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 27, 2023, as amended and supplemented by our Form 10-K/A filed with the SEC on April 27, 2023 and as updated and supplemented by our Current Report on Form 8-K filed with the SEC on July 13, 2023 (only with respect to Item 8.01 information) (collectively, the “Annual Report”) captioned “Risk Factors” and “Statement Regarding Forward Looking Information,” the “Risk Factors” sections of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023 and all other information included in this prospectus and the documents incorporated by reference herein for a discussion of factors that should be considered before investing in the notes. |
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
The following tables set forth our summary consolidated financial and operating data. The summary consolidated financial, data as of September 30, 2023, and for each of the nine-month periods ended September 30, 2023 and September 30, 2022, set forth below have been derived from our unaudited consolidated financial statements and notes thereto incorporated by reference in this prospectus. The summary consolidated financial data, dated as of December 31, 2022, and for each of the years ended December 31, 2022 and December 31, 2021, set forth below have been derived from our audited consolidated financial statements and notes thereto incorporated by reference in this prospectus.
Our historical results are not necessarily indicative of future operating results. You should read this information in conjunction with the sections of the Annual Report and our Quarterly Reports on Form 10-Q for the quarters ended September 30, June 30, 2023 and March 31, 2023 captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements incorporated by reference in this prospectus, as well as “Non-GAAP Financial Measures” below for a discussion regarding non-GAAP financial measures, including related definitions and reconciliations to comparable measures in accordance with the accounting principles generally accepted in the United States (“GAAP”).
The following table summarizes our results of operations:
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| Nine months ended September 30, | | Year ended December 31, |
(Dollars and shares in millions, except per share data) | 2023 | | 2022 | | 2022 | | 2021 |
Consolidated Statements of Earnings Data | | | | | | | |
Total revenues | $ | 2,888 | | | $ | 1,722 | | | $ | 2,349 | | | $ | 3,974 | |
Total expenses | 2,548 | | | 657 | | | 1,556 | | | 2,422 | |
Earnings before income taxes | 340 | | | 1,065 | | | 793 | | | 1,552 | |
Net earnings | 241 | | | 811 | | | 635 | | | 1,240 | |
Adjusted net earnings (“ANE”) (a) | 260 | | | 223 | | | 353 | | | 640 | |
Per Share Metrics | | | | | | | |
Net earnings per share, basic | $ | 1.94 | | | $ | 7.24 | | | $ | 5.52 | | | $ | 11.81 | |
Net earnings per share, diluted | 1.93 | | | 7.24 | | | 5.52 | | | 11.81 | |
ANE per share, diluted(a) | 2.08 | | | 1.99 | | | 3.07 | | | 6.10 | |
Weighted average shares outstanding, basic | 124 | | | 112 | | | 115 | | | 105 | |
Weighted average shares outstanding, diluted | 125 | | | 112 | | | 115 | | | 105 | |
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(a)Non-GAAP financial measure. See “Non-GAAP Financial Measures.”
The following table provides certain consolidated balance sheet data:
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| As of September 30, | | As of December 31, |
(Dollars in millions, except per share data) | 2023 | | 2022 | | 2022 | | 2021 |
Consolidated Balance Sheet Data (GAAP) | | | | | | | |
Total assets | $ | 63,623 | | | $ | 50,870 | | | $ | 54,628 | | | $ | 49,370 | |
Total liabilities | 61,251 | | | 48,477 | | | 52,223 | | | 44,336 | |
Total equity | 2,372 | | | 2,393 | | | 2,405 | | | 5,034 | |
Accumulated other comprehensive (loss) income (“AOCI”) | (3,040) | | | (3,028) | | | (2,818) | | | 833 | |
Total debt (aggregate principal amount) | 1,565 | | | 550 | | | 1,100 | | | 950 | |
Total debt-to-capitalization ratio (a) | 39.8 | % | | 18.7 | % | | 31.4 | % | | 15.9 | % |
Book value per share | 18.98 | | | 19.14 | | | 19.09 | | | 47.94 | |
Return on average equity | 2.7 | % | | 23.7 | % | | 19.0 | % | | 26.7 | % |
Consolidated Balance Sheet Data (Non-GAAP) | | | | | | | |
Total equity, excluding AOCI (b) | $ | 5,412 | | | $ | 5,421 | | | $ | 5,223 | | | $ | 4,201 | |
Total debt-to-capitalization ratio, excluding AOCI (b) | 22.4 | % | | 9.2 | % | | 17.4 | % | | 18.4 | % |
Book value per share, excluding AOCI (b) | 43.30 | | | 43.37 | | | 41.45 | | | 40.01 | |
Return on average equity, excluding AOCI (b) | 1.2 | % | | 19.7 | % | | 12.9 | % | | 33.9 | % |
Adjusted return on average equity, excluding AOCI (b) | 7.4 | % | | 8.5 | % | | 7.2 | % | | 17.5 | % |
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(a)Total debt-to-capitalization ratio is computed by dividing total aggregate principal amount of debt by total capitalization (which is defined as total debt plus total equity).
(b)Non-GAAP financial measure. See “Non-GAAP Financial Measures.”
The following table summarizes our AUM, average AUM (“AAUM”), yield on AAUM and adjusted return on assets:
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| Nine months ended September 30, | | Year ended December 31, |
| (Dollars in millions) | 2023 | | 2022 | | 2022 | | 2021 |
Select Metrics | | | | | | | |
AUM | $ | 47,437 | | | $ | 41,988 | | | $ | 43,568 | | | $ | 36,494 | |
AAUM | 45,541 | | | 39,246 | | | 40,069 | | | 31,938 | |
Yield on AAUM | 4.73 | % | | 4.13 | % | | 4.13 | % | | 5.80 | % |
Adjusted return on assets (a) | 0.76 | % | | 0.76 | % | | 0.88 | % | | 2.00 | % |
__________________
(a)Non-GAAP financial measure. See “Non-GAAP Financial Measures.”
The following table summarizes our sales by product type:
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | Year ended December 31, |
(Dollars in millions) | 2023 | | 2022 | | 2022 | | 2021 |
Sales by Product Type | | | | | | | |
Fixed indexed annuities | $ | 3,557 | | | $ | 3,185 | | | $ | 4,550 | | | $ | 4,310 | |
Fixed rate annuities | 3,313 | | | 2,668 | | | 3,744 | | | 1,738 | |
Total annuity | 6,870 | | | 5,853 | | | 8,294 | | | 6,048 | |
Indexed universal life | 117 | | | 92 | | | 127 | | | 87 | |
Funding agreements | 871 | | | 1,443 | | | 1,443 | | | 2,310 | |
Pension risk transfer | 1,212 | | | 1,147 | | | 1,390 | | | 1,147 | |
Gross Sales | 9,070 | | | 8,535 | | | 11,254 | | | 9,592 | |
Sales attributable to flow reinsurance to third parties | (2,381) | | | (1,440) | | | (2,248) | | | (869) | |
Net Sales | $ | 6,689 | | | $ | 7,095 | | | $ | 9,006 | | | $ | 8,723 | |
Non-GAAP Financial Measures
In addition to our results presented in accordance with GAAP, our results of operations include certain non-GAAP financial measures commonly used in our industry. These measures should be considered supplementary to our results in accordance with GAAP and should not be viewed as a substitute for the GAAP measures. See the section of our Annual Report captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” incorporated by reference in this prospectus for further discussions regarding non-GAAP financial measures, including management’s reasons for presenting the non-GAAP financial measures.
Set forth below is definition of each non-GAAP financial measure included in the above summary consolidated financial and operating information, as well as a reconciliation of each non-GAAP financial measure to the comparable GAAP financial measure.
ANE
ANE is a non-GAAP financial measure we use to evaluate financial performance each period. ANE is calculated by adjusting net earnings to eliminate:
•Recognized (gains) and losses, net: the impact of net investment gains/losses, including changes in allowance for expected credit losses and other than temporary impairment losses, recognized in operations; and the effects of changes in fair value of the reinsurance related embedded derivative and other derivatives, including interest rate swaps and forwards;
•Market related liability adjustments: the impacts related to changes in the fair value, including both realized and unrealized gains and losses, of index product related derivatives and embedded derivatives, net of hedging cost; the impact of initial pension risk transfer deferred profit liability losses, including amortization from previously deferred pension risk transfer deferred profit liability losses; and the changes in the fair value of market risk benefits by deferring current period changes and amortizing that amount over the life of the market risk benefit;
•Purchase price amortization: the impacts related to the amortization of certain intangibles (internally developed software, trademarks and value of distribution asset recognized as a result of acquisition activities);
•Transaction costs: the impacts related to acquisition, integration and merger related items;
•Other “non-recurring,” “infrequent” or “unusual items”: Management excludes certain items determined to be “non-recurring,” “infrequent” or “unusual” from ANE when incurred if it is determined these expenses are not a reflection of the core business and when the nature of the item is such that it is not reasonably likely to recur within two years and/or there was not a similar item in the preceding two years; and
•Income taxes: the income tax impact related to the above-mentioned adjustments is measured using an effective tax rate, as appropriate by tax jurisdiction.
While these adjustments are an integral part of our overall performance, market conditions and/or the non-operating nature of these items can overshadow the underlying performance of the core business. Accordingly, management considers this to be a useful measure internally and to investors and analysts in analyzing the trends of our operations. ANE should not be used as a substitute for net earnings. However, we believe the adjustments made to net earnings in order to derive ANE provide an understanding of our overall results of operations.
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | Year ended December 31, |
(Dollars in millions) | 2023 | | 2022 | | 2022 | | 2021 |
Reconciliation of Net Earnings to ANE | | | | | | | |
Net earnings from continuing operations | $ | 241 | | | $ | 811 | | | $ | 635 | | | $ | 1,232 | |
Recognized (gains) and losses, net | 100 | | | (19) | | | 117 | | | (109) | |
Market related liability adjustments | (95) | | | (751) | | | (534) | | | (233) | |
Purchase price amortization | 16 | | | 16 | | | 21 | | | 26 | |
Transaction costs and other non-recurring items | 3 | | | 8 | | | 10 | | | (430)(a) |
Income taxes on non-GAAP adjustments | (5) | | | 158 | | | 104 | | | 154 | |
ANE | $ | 260 | | | $ | 223 | | | $ | 353 | | | $ | 640 | |
__________________
(a)For the year ended December 31, 2021, reflects a one-time favorable adjustment to benefits and other changes in policy reserves and depreciation and amortization resulting from an actuarial system conversion which reflects modeling enhancement and other refinements of $435 million.
ANE per Share
ANE per share is calculated as ANE divided by the weighted-average common shares outstanding. Management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders.
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | Year ended December 31, |
| 2023 | | 2022 | | 2022 | | 2021 |
Reconciliation of Net Earnings Per Share to ANE Per Share | | | | | | | |
Net earnings per share, diluted | $ | 1.93 | | | $ | 7.24 | | | $ | 5.52 | | | $ | 11.73 | |
Recognized (gains) and losses, net | 0.80 | | | (0.17) | | | 1.02 | | | (1.03) | |
Market related liability adjustments | (0.76) | | | (6.70) | | | (4.64) | | | (2.22) | |
Purchase price amortization | 0.13 | | | 0.14 | | | 0.18 | | | 0.25 | |
Transaction costs and other non-recurring items | 0.02 | | | 0.07 | | | 0.09 | | | (4.10) | |
Income taxes on non-GAAP adjustments | (0.04) | | | 1.41 | | | 0.90 | | | 1.47 | |
ANE per share, diluted | $ | 2.08 | | | $ | 1.99 | | | $ | 3.07 | | | $ | 6.10 | |
Total Equity, excluding AOCI
Total equity, excluding AOCI is based on total equity, excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in
instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts assessing the level of earned equity on total equity.
| | | | | | | | | | | | | | | | | | | | | | | |
| As of September 30, | | As of December 31, |
(Dollars in millions) | 2023 | | 2022 | | 2022 | | 2021 |
Reconciliation of Total Equity to Total Equity, excluding AOCI | | | | | | | |
Total equity | $ | 2,372 | | | $ | 2,393 | | | $ | 2,405 | | | $ | 5,034 | |
AOCI | (3,040) | | | (3,028) | | | (2,818) | | | 833 | |
Total equity, excluding AOCI | $ | 5,412 | | | $ | 5,421 | | | $ | 5,223 | | | $ | 4,201 | |
Total Debt-to-Capitalization, excluding AOCI
Total debt-to-capitalization ratio, excluding AOCI is computed by dividing the total aggregate principal amount of debt by total capitalization (total debt plus total equity, excluding AOCI). Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing its capital position.
| | | | | | | | | | | | | | | | | | | | | | | |
| As of September 30, | | As of December 31, |
(Dollars in millions) | 2023 | | 2022 | | 2022 | | 2021 |
Reconciliation of Total Debt-to-Capitalization Ratio to Debt-to-Capitalization Ratio, Excluding AOCI | | | | | | | |
Total debt-to-capitalization ratio (a) | 39.8 | % | | 18.7 | % | | 31.4 | % | | 15.9 | % |
Total capitalization (total debt + total equity) | $ | 3,937 | | | $ | 2,943 | | | $ | 3,505 | | | $ | 5,984 | |
Total debt (aggregate principal amount) | 1,565 | | | 550 | | | 1,100 | | | 950 | |
Total equity, excluding AOCI | 5,412 | | | 5,421 | | | 5,223 | | | 4,201 | |
Total capitalization, excluding AOCI | 6,977 | | | 5,971 | | | 6,323 | | | 5,151 | |
Total debt-to-capitalization ratio, excluding AOCI | 22.4 | % | | 9.2 | % | | 17.4 | % | | 18.4 | % |
__________________
(a)Total debt-to-capitalization ratio is computed by dividing total aggregate principal amount of debt by total capitalization (which is defined as total debt plus total equity).
Book Value per Share, excluding AOCI
Book value per share, excluding AOCI is calculated as total equity, excluding AOCI divided by the total number of shares of common stock outstanding. Management considers this to be a useful measure internally and for investors and analysts to assess the capital position of the Company.
| | | | | | | | | | | | | | | | | | | | | | | |
| As of September 30, | | As of December 31, |
(Dollars in millions, except per share data) | 2023 | | 2022 | | 2022 | | 2021 |
Reconciliation of Book Value Per Share to Book Value Per Share, excluding AOCI | | | | | | | |
Book value per share | $ | 18.98 | | | $ | 19.14 | | | $ | 19.09 | | | $ | 47.94 | |
Total equity | 2,372 | | | 2,393 | | | 2,405 | | | 5,034 | |
AOCI | (3,040) | | | (3,028) | | | (2,818) | | | 833 | |
Total equity, excluding AOCI | 5,412 | | | 5,421 | | | 5,223 | | | 4,201 | |
Total number of shares of common stock outstanding (in millions) | 125 | | | 125 | | | 126 | | | 105 | |
Book value per share, excluding AOCI | 43.30 | | | 43.37 | | | 41.45 | | | 40.01 | |
Return on Average Equity, excluding AOCI & Adjusted Return on Average Equity, excluding AOCI
Return on average equity, excluding AOCI is calculated by dividing the rolling four quarters net earnings, by total average equity excluding AOCI. Average equity, excluding AOCI for the twelve month rolling period is the average of 5 points throughout the period. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders.
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | Year ended December 31, |
| 2023 | | 2022 | | 2022 | | 2021 |
Reconciliation of Return on Average Equity to (1) Return on Average Equity, excluding AOCI and (2) Adjusted Return on Average Equity, excluding AOCI | | | | | | | |
Return on average equity | 2.7 | % | | 23.7 | % | | 19.0 | % | | 26.7 | % |
AOCI | (1.5) | % | | (4.0) | % | | (6.1) | % | | 7.2 | % |
| Return on average equity, excluding AOCI | 1.2 | % | | 19.7 | % | | 12.9 | % | | 33.9 | % |
Aggregate adjustments to arrive at ANE | 6.2 | % | | (11.2) | % | | (5.7) | % | | (16.4) | % |
Adjusted return on average equity, excluding AOCI | 7.4 | % | | 8.5 | % | | 7.2 | % | | 17.5 | % |
Adjusted Return on Assets
Adjusted return on assets is calculated by dividing year-to-date annualized ANE by year-to-date AAUM. Return on assets is composed of net investment income, less cost of funds and less expenses (including operating expenses, interest expense and income taxes) consistent with our ANE definition and related adjustments. Cost of funds includes liability costs related to cost of crediting as well as other liability costs. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing financial performance and profitability earned on AAUM.
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| Nine months ended September 30, | | Year ended December 31, |
| 2023 | | 2022 | | 2022 | | 2021 |
| Reconciliation of Portfolio Earned Yield to Adjusted Return on Assets | | | | | | | |
| Portfolio earned yield | 4.73 | % | | 4.13 | % | | 4.13 | % | | 5.80 | % |
| Cost of funds | (2.73) | % | | (2.29) | % | | (2.37) | % | | (2.49) | % |
| Product margin | 2.00 | % | | 1.84 | % | | 1.76 | % | | 3.31 | % |
| Expenses (operating, interest & taxes) | (1.24) | % | | (1.08) | % | | (0.88) | % | | (1.31) | % |
Adjusted return on assets | 0.76 | % | | 0.76 | % | | 0.88 | % | | 2.00 | % |
RISK FACTORS
Before you invest in our notes, you should know that making such an investment involves significant risks, including the risks described below. You should carefully consider the following information about these risks, together with the other information contained in this prospectus and the information incorporated by reference herein. In particular, you should carefully consider the “Risk Factors” and other information contained in the Annual Report and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, each of which is incorporated by reference into this prospectus, before purchasing the notes offered pursuant to this prospectus. The risks that we have highlighted here or in the information incorporated by reference herein are not the only ones that we face. Additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations. If any of the risks actually occurs, our business, financial condition or results of operations could be negatively affected and you could lose all or part of your investment.
Risk Factors Related to this Offering and the Notes
The notes and the guarantees will be structurally subordinated to all existing and future indebtedness, other liabilities and preferred equity of our and the guarantors’ subsidiaries that are not guarantors.
As a holding company, we conduct substantially all of our operations through our subsidiaries, meaning we derive substantially all of our operating income from, and hold substantially all of our assets through, our subsidiaries. As a result, our ability to meet our obligations on the notes and our other debt obligations depends on our ability to receive distributions from these subsidiaries. These subsidiaries are separate and distinct legal entities and, beyond the obligations that certain subsidiaries have as guarantors, have no obligation to pay any amounts due on our indebtedness, including the notes, or to provide us with funds to satisfy our payment obligations, whether by dividends, distributions, loans or otherwise. The notes will be guaranteed by each of our existing and future direct and indirect subsidiaries that are guarantors of our obligations under the Credit Agreement. The notes will not be guaranteed by any of our other subsidiaries, including our insurance subsidiaries. As a result, the notes and the guarantees will be structurally subordinated to all indebtedness, other liabilities (including liabilities to policyholders and contract holders) and preferred equity of our subsidiaries that are not guarantors. Therefore, in the event of the liquidation, dissolution, winding up or other bankruptcy event of a subsidiary that is not a guarantor, following payment by such subsidiary of its indebtedness, other liabilities and preferred equity, such subsidiary may not have sufficient assets remaining in order to make payments to the Issuer, as a shareholder or otherwise. As of September 30, 2023, our non-guarantor subsidiaries had no aggregate indebtedness, and our insurance subsidiaries had $52.1 billion in aggregate liabilities to policyholders and contract holders, which would have effectively ranked senior to the notes and the guarantees.
The notes and the guarantees will be effectively subordinated to our and the guarantors’ secured indebtedness.
The notes and the guarantees will not be secured by any of our or the guarantors’ assets or the assets of our non-guarantor subsidiaries. As a result, the notes and the guarantees will be effectively subordinated to any secured indebtedness we or the guarantors may incur, to the extent of the value of the assets securing such indebtedness. If we or any of the guarantors are declared bankrupt or insolvent, or if we or any of the guarantors default under any of our or their future indebtedness that is secured by assets, the holders of such indebtedness could declare all of the funds borrowed thereunder, together with accrued interest, immediately due and payable. If we or any of the guarantors are unable to repay such indebtedness, the holders of such indebtedness could foreclose on such assets to the exclusion of holders of the notes and the guarantees, even if an event of default exists under the indenture at such time. In any such event, because the notes and the guarantees will not be secured by such assets, it is possible that there would be no assets remaining from which claims of the holders of the notes and the guarantees could be satisfied or, if any assets remained, they may be insufficient to satisfy such holders’ claims fully.
We will depend substantially on our insurance company subsidiaries for funds to meet our payment obligations under the notes, which may be limited by law.
We conduct substantially all of our operations through our insurance company subsidiaries, including, principally, FGL Insurance and FGL NY Insurance. Our insurance company subsidiaries are restricted by state insurance laws in their ability to pay dividends and make distributions.
Under the insurance laws of the jurisdictions in which our insurance company subsidiaries are domiciled, an insurer is restricted with respect to the timing or the amount of dividends it may pay without prior approval by applicable regulatory authorities. For example, the Iowa insurance law and the New York insurance law regulate the amount of dividends that may be paid in any year by FGL Insurance and FGL NY Insurance, respectively. Based on FGL Insurance’s statutory financial results for the year ended December 31, 2022 and capital and surplus as of December 31, 2022, FGL Insurance will only be able to pay dividends to us during 2023 with the prior approval of the Iowa Insurance Commissioner.
Currently, many of our subsidiaries are owned directly by FGL Insurance. Accordingly, all dividends paid by such entities are not paid directly to us, but rather are paid to FGL Insurance and, as described above, the amount of dividends that can be paid to us by FGL Insurance is limited by law. Accordingly, it is possible that our indirect subsidiaries will pay dividends to FGL Insurance, but FGL Insurance will be unable to pay all or a part of any such dividend to us as a result of restrictions under applicable insurance laws and regulations and Iowa corporate law or that of any other state or jurisdiction.
The amount of any dividend an insurance company subsidiary may pay without prior regulatory approval is not necessarily indicative of the insurer’s actual ability to pay dividends, which may be constrained by business and regulatory considerations, such as the impact of dividends on surplus, which could affect the insurer’s ratings or competitive position, the amount of premiums that can be written and the ability to pay future dividends. Further, depending on business and regulatory conditions, we may in the future need to retain cash in our insurance company subsidiaries or even contribute cash to one or more of them in order to maintain their ratings or their statutory capital position. Such a requirement could be the result of investment losses, reserve charges, adverse operating conditions in the current economic environment or changes in interpretation of statutory accounting requirements by regulators.
We maintain consolidated accounting records in accordance with GAAP and our insurance company subsidiaries maintain accounting records in accordance with applicable statutory accounting practices (“SAP”). The amount of dividends that can be paid to us by FGL Insurance, and by our indirect subsidiaries to FGL Insurance (including FGL NY Insurance), without prior regulatory approval is based on such subsidiaries’ earnings and capital and surplus determined under SAP, which can differ materially from earnings and capital and surplus reported on a GAAP basis.
In addition, the amount of dividends that our subsidiaries, including our insurance company subsidiaries, can pay may also be limited by applicable corporate laws, which laws generally provide that a corporation cannot pay dividends at any period when its liabilities exceed its assets or when it is unable to pay its debts as they become due in the usual course of business, and may be limited by other contractual arrangements to which such subsidiaries are party, including the terms of other indebtedness.
We are subject to statutory provisions under which our assets could be used to satisfy claims of FGL Insurance’s policyholders.
As a holding company parent of FGL Insurance, we are subject to regulation, both directly and indirectly, by the Iowa Insurance Commissioner. Each state has rehabilitation and liquidation laws that authorize the insurance regulatory authorities to commence proceedings to place an insurer domiciled in such state under supervision, or to rehabilitate or liquidate it, on several grounds, including insolvency and other hazardous financial conditions and events. Under Iowa law, in any proceeding commenced by the Iowa Insurance Commissioner for the purpose of liquidating, rehabilitating, conserving or otherwise reorganizing FGL Insurance, our assets may be deemed to be available to satisfy the policyholder obligations of FGL Insurance. Therefore, it is likely that in a supervision, rehabilitation or liquidation proceeding under Iowa law involving FGL Insurance, we would be named as a party. As
a party in any such proceeding, insurance regulatory authorities would likely seek to use our assets to pay the claims of policyholders of FGL Insurance. This would adversely affect our ability to make payments due under the notes.
The Credit Agreement restricts our current and future operations, particularly our ability to respond to changes or to take certain actions.
The Credit Agreement imposes significant operating and financial restrictions and limits our ability and the ability of our subsidiaries to:
•incur additional indebtedness and make guarantees;
•incur liens on assets;
•engage in mergers or consolidations or fundamental changes;
•sell or dispose of assets;
•pay dividends and distributions or repurchase capital stock;
•make investments, loans and advances, including acquisitions;
•enter into certain transactions with affiliates;
•enter into certain agreements that would restrict the ability of subsidiaries to make payments to us;
•change the nature of the business, accounting policies or reporting practices affecting the calculation of the financial covenants; and
•cause FGL Insurance to cease to be our direct or indirect subsidiary.
As a result of these covenants and restrictions, we are and will be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. In addition, we will be required to maintain specified financial ratios and satisfy other financial condition tests. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders or amend the covenants.
Our failure to comply with the restrictive covenants described above as well as others contained in our future debt instruments from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms, our results of operations and financial condition could be adversely affected.
The indenture contains only limited protection for holders of the notes and, except in certain limited circumstances, will not restrict our ability to incur additional debt, repurchase our securities or take other actions that could negatively impact holders of the notes.
We are not restricted under the terms of the indenture, pursuant to which the notes will be issued, from incurring additional debt or repurchasing our securities. In addition, the indenture does not contain any covenants which require us to achieve or maintain any minimum financial results or financial position. Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the indenture could have the effect of diminishing our ability to make payments on the notes when due.
The terms of the notes will not necessarily afford holders of the notes protection in the event of a highly leveraged transaction that may adversely affect holders of the notes, including a reorganization, recapitalization, restructuring, merger or other similar transaction involving us. As a result, we could enter into any such transaction even though the transaction could increase the total amount of our outstanding debt, adversely affect our capital structure or the credit ratings of our debt securities, or otherwise adversely affect the holders of the notes. For a variety of reasons, these transactions may not necessarily constitute a Change of Control Triggering Event that
affords holders the protections described under “Description of the Notes—Repurchase upon Change of Control Triggering Event.” Except as described under “Description of the Notes—Repurchase upon Change of Control Triggering Event,” the indenture does not contain any provisions that permit the holders of the notes to require us to repurchase the notes in the event of a takeover, recapitalization or similar transaction.
A Change of Control (as defined under “Description of the Notes—Certain Covenants of the Issuer—Certain Definitions”) includes a disposition to any person, other than a Permitted Holder, of all or substantially all of our assets and the assets of our subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “all or substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances, there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of the assets of us and our subsidiaries taken as a whole. As a result, the ability of the holders of the notes to require us to offer to repurchase notes as a result of a transfer of less than all of our assets to another person may be uncertain.
The guarantees of the notes are limited in nature, and any guarantor that is released from its obligations under the Credit Agreement will be automatically released from its guarantee of the notes.
The notes will only be guaranteed by each of our existing and future direct and indirect subsidiaries that are guarantors of our obligations under the Credit Agreement. If any such subsidiary (including any newly formed, newly acquired or newly re-designated subsidiary) guarantees (or becomes a co-borrower or co-issuer in respect of) our obligations or any guarantor’s obligations under any credit facility (or commitments therefor) that we enter into or that such guarantor enters into (other than the Credit Agreement) or any capital markets debt that we issue or that such guarantor issues, such subsidiary will not be required to guarantee our obligations under the notes and the indenture. Furthermore, if any of our subsidiaries that serves as a guarantor under the notes is released from its obligations under the Credit Agreement (other than if such guarantor is released because of payment under its guarantee), the guarantee of the notes by that subsidiary will be released without action by, or consent of, any holder of the notes or the trustee. See “Description of the Notes—General Terms of the Guarantees.” You will not have a claim as a creditor against any subsidiary that is not a guarantor of the notes due to the limited nature of the guarantees or that ceases to be a guarantor of the notes due to the release of its guarantees.
We may not be able to repurchase all of the notes upon a Change of Control Triggering Event.
As described under “Description of the Notes—Repurchase upon Change of Control Triggering Event,” unless we have otherwise redeemed the notes, we will be required to offer to repurchase the notes upon the occurrence of a Change of Control Triggering Event with respect to the notes. We may not have sufficient funds to repurchase the notes for cash at such time. In addition, our ability to repurchase the notes for cash may be limited or prohibited by law or our credit, lease or operating agreements in existence at the time. To the extent we are unable to obtain relief from any such limitations or prohibitions, we may be unable to repurchase the notes. In addition, the Credit Agreement contains an event of default upon certain events that constitute a change of control which will obligate us to repay any indebtedness outstanding under the Credit Agreement upon an acceleration of such indebtedness. Regardless of the cause, our failure to offer to repurchase the notes could constitute an event of default under the indenture which could, in turn, constitute a default under other of our agreements relating to our indebtedness outstanding at the time, including the Credit Agreement.
There is currently no market for the notes, and we cannot assure you that an active trading market for the notes will develop. The notes may trade at prices below the price you paid for them.
The notes are a new issue of debt securities for which there currently is no trading market. We intend to apply to list the notes on the NYSE, and if the application is approved, we expect trading in the notes on the NYSE to begin within 30 days of the original issue date. Although we expect the notes to be listed on the NYSE, we cannot provide any assurances that we will successfully list the notes or that an active trading market will develop for the notes. Further, we cannot provide any assurances as to the liquidity of any trading market that may develop for the notes, your ability to sell your notes or the price at which you will be able to sell your notes. Future trading prices of the notes will depend on many factors, including prevailing interest rates, our financial condition and results of
operations, the then-current ratings assigned to the notes and the market for similar securities. Any trading market that develops may be affected by many factors independent of and in addition to the foregoing, including:
•time remaining prior to the maturity of the notes;
•the outstanding amount of the notes;
•the terms related to optional redemption of the notes; and
•level, direction and volatility of market interest rates generally.
Certain of the underwriters have advised us that they presently intend to make a market in the notes. However, they are not obligated to do so, and any market making with respect to the notes may be discontinued without notice, in the underwriters’ sole discretion.
Any downgrade in our credit ratings could limit our ability to obtain future financing, increase our borrowing costs and adversely affect the market price of our outstanding debt securities, including the notes, or otherwise impair our business, financial condition, cash flows and results of operations.
We expect that the notes will be rated by at least one nationally recognized credit rating agency. A debt rating is not a recommendation to purchase, sell or hold the notes. These ratings are not intended to correspond to market price or suitability of the notes for any particular investors. Credit rating agencies continually review their ratings for the companies that they follow, including us. Credit rating agencies also evaluate the industries in which we operate as a whole and may change their credit rating for us based on their overall view of such industries. There can be no assurance that any rating assigned to any of our debt securities, including the notes, will remain in effect for any given period of time or that any such ratings will not be lowered, suspended or withdrawn entirely by a credit rating agency if, in that credit rating agency’s judgment, circumstances so warrant.
A downgrade of our credit ratings could, among other things:
•adversely affect the market price of our debt securities, including the notes;
•limit our access to the capital markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all;
•result in more restrictive covenants in agreements governing the terms of any future indebtedness that we may incur;
•increase our cost of borrowing; and
•impair our business, financial condition, cash flows and results of operations.
Redemption may adversely affect the investment return on the notes.
We have the right to redeem some or all of the notes prior to maturity, as described under “Description of the Notes—Optional Redemption” and “—Tax Event Redemption.” We may redeem the notes at times when prevailing interest rates may be relatively low. Accordingly, holders of the notes may not be able to reinvest the redemption proceeds in a comparable security and obligor at an effective interest rate as high as that of the notes.
An increase in market interest rates could result in a decrease in the relative value of the notes.
In general, as market interest rates rise, notes bearing interest at a fixed rate generally decline in value. Consequently, if you purchase these notes and market interest rates increase, the market value of the notes may decline. We cannot predict the future level of market interest rates.
Federal and state laws may permit courts, under specific circumstances, to void the notes and/or any of the guarantees as a fraudulent transfer or conveyance, subordinate claims in respect of the notes and/or any of the guarantees and require you to return payments received. If that occurs, you may not receive any payments on the notes or any of the guarantees.
Federal and state creditor-protection related laws, including fraudulent transfer and fraudulent conveyance statutes, may apply to the notes and any of the guarantees. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or fraudulent conveyance laws, which may vary from state to state, the notes or any of the guarantees thereof could be voided as fraudulent transfers or conveyances if we or any of the guarantors, as applicable, (i) issued the notes or incurred the guarantees with the actual intent of hindering, delaying or defrauding current or future creditors or (ii) received less than reasonably equivalent value or fair consideration in return for either issuing the notes or incurring the guarantees and, in the case of (ii) only, one of the following is also true at the time thereof:
•we or any such guarantors, as applicable, were insolvent or rendered insolvent by reason of the issuance of the notes or the incurrence of any such guarantees;
•the issuance of the notes or the incurrence of any such guarantees left us or any such guarantors, as applicable, with an unreasonably small amount of capital or assets to carry on business; or
•we or any such guarantors intended to, or believed that we or such guarantor would, incur debts beyond our or any guarantor’s ability to pay as they mature.
As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or a valid antecedent debt is secured or satisfied. A court could find that we or any guarantor did not receive reasonably equivalent value or fair consideration for the notes or any of the guarantees, as applicable, to the extent that we or any guarantor did not obtain a reasonably equivalent benefit directly or indirectly from the issuance of the notes or the applicable guarantees.
The bankruptcy code defines “insolvent” as to an entity other than a partnership or a municipality as the sum of its debts, including contingent and unliquidated liabilities, being greater than the fair value of all of its assets. We cannot be certain as to the standards a court would use to determine whether or not we or any guarantors were insolvent at the relevant time.
If a court were to find that the issuance of the notes or the incurrence of a guarantee of the notes was a fraudulent transfer or conveyance, the court could void the payment obligations under the notes or that guarantee (the effect being that holders of the notes would cease to have a claim under the notes or such guarantee) and could require the holders of the notes to repay any amounts received with respect to the notes or that guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the notes. Further, the voiding of the notes or any of the guarantees could result in an event of default with respect to the notes or our and our subsidiaries’ other debt that could result in acceleration of the notes or that debt.
Although the indenture contains a provision intended to limit any guarantor’s liability under its guarantee of the notes to the maximum amount as will not result in the obligations of such guarantor under its guarantee of the notes constituting a fraudulent conveyance or fraudulent transfer under applicable law, this provision may not be effective to protect any guarantees of the notes from being voided under fraudulent conveyance, fraudulent transfer or similar laws, or prevent that guarantor’s obligation from being reduced to an amount that effectively makes its guarantee worthless. If any guarantees of the notes by any of the guarantors were held to be unenforceable, the notes would be equity of such guarantor.
Finally, the bankruptcy court may subordinate the claims in respect of the notes or the guarantees of the notes to other claims against us or any guarantors under the principle of equitable subordination if the court determines that (i) the holder of notes engaged in some type of inequitable conduct, (ii) the inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holders of notes and (iii) equitable subordination is not inconsistent with the provisions of the bankruptcy code.
Insolvency laws of Bermuda may not be as favorable to you as the U.S. bankruptcy laws and may preclude holders of the notes from recovering payments due under the notes.
CF Bermuda is incorporated in Bermuda and, as a guarantor, is a party to certain key agreements affecting your rights as holders of the notes and your ability to recover under the notes. The insolvency laws of Bermuda may not be as favorable to your interests as creditors as the laws of the United States or other jurisdictions with which you may be familiar, including in the areas of rights of creditors, priority of governmental and other creditors, ability to obtain post-petition interest and the duration of the proceeding. See “Limitations on Validity and Enforceability of CF Bermuda Guarantee” for a description of the insolvency laws in Bermuda, which could limit the enforceability of the guarantee of CF Bermuda.
In the event that we, any one or more of the guarantors or any other of our subsidiaries experiences financial difficulty, it is not possible to predict with certainty in which jurisdiction or jurisdictions insolvency or similar proceedings would be commenced, or the outcome of such proceedings.
Enforcing your rights as a holder of the notes or under the guarantees across multiple jurisdictions may be difficult.
The notes will be issued by a U.S. entity and will be guaranteed by CF Bermuda, a Bermuda entity. In the event of bankruptcy, insolvency or a similar event, proceedings could be initiated in either of these jurisdictions. Your rights under the notes and the guarantees may therefore be subject to the laws of multiple jurisdictions, and you may not be able to enforce effectively your rights in multiple bankruptcy, insolvency and other similar proceedings. Moreover, such multi-jurisdictional proceedings are typically complex and costly for creditors and often result in substantial uncertainty and delay in the enforcement of creditors’ rights. In addition, the bankruptcy, insolvency, foreign exchange, administration and other laws of the various jurisdictions may be materially different from or in conflict with one another and those of the United States, including in respect of creditor’s rights, priority of creditors, the ability to obtain post-petition interest and the duration of the insolvency proceeding. The consequences of the multiple jurisdictions involved could trigger disputes over which jurisdiction’s law should apply, which could adversely affect your ability to enforce your rights and to collect payment in full under the notes and the guarantees.
You may be unable to enforce judgments obtained in the United States and foreign courts against CF Bermuda or its directors and officers.
CF Bermuda, as a guarantor, is, and will continue to be, a non-resident of the United States. As a consequence, you may not be able to effect service of process on CF Bermuda (or its directors and officers, if applicable) or to enforce judgments of U.S. courts in any civil liability proceedings under the U.S. federal securities laws. Moreover, any judgment obtained in the United States against CF Bermuda (or its directors and officers, if applicable), including judgments with respect to the payment of principal, premium, if any, and interest on the notes, may not be collectible in the United States. There is also uncertainty about the enforceability in the courts of certain jurisdictions, including judgments obtained in the United States against CF Bermuda, whether or not predicated upon the federal securities laws of the United States. See “Service of Process and Enforcement of Civil Liabilities.”
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference herein, contains information that includes or is based upon “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are intended to enhance the reader’s ability to assess our future financial and business performance.
Some of the forward-looking statements can be identified by the use of terms such as “believes,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. However, not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not related to present facts or current conditions or that are not historical facts. They appear in a number of places throughout this prospectus and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our consolidated results of operations, financial condition, liquidity, prospects and growth strategies and the industries in which we operate and including, without limitation, statements relating to our future performance.
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which are beyond our control. We caution you that forward-looking statements are not guarantees of future performance and that our actual consolidated results of operations, financial condition and liquidity, and industry developments may differ materially from those made in or suggested by the forward-looking statements contained or incorporated by reference in this prospectus. In addition, even if our consolidated results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained or incorporated by reference in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors could cause actual results to differ materially from those contained in or implied by the forward-looking statements, including the risks and uncertainties discussed in the “Risk Factors” section beginning on page 13 of this prospectus and the “Risk Factors” and “Statement Regarding Forward-Looking Information” sections in our Annual Report and in any other documents that are incorporated by reference into this prospectus. See “Where You Can Find More Information” and “Incorporation by Reference” for information about how to obtain copies of those documents. Forward-looking statements in the description of the proposed investment by FNF in “Prospectus Summary—Recent Developments” are subject to risks and uncertainties, including, but not limited to: diversion of management's attention; the ability of the FNF and F&G special committees to negotiate mutually acceptable terms for the investment; the potential impact of the consummation of further investment by FNF in F&G on relationships, including with employees, suppliers, customers and competitors; our ability to successfully realize the anticipated benefits of the investment; and general economic conditions and other factors, including prevailing interest and unemployment rate levels and stock and credit market performance.
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the notes in this offering will be approximately $ (or approximately $ if the underwriters fully exercise their overallotment option), after deducting the underwriting discount and estimated offering expenses payable by us. We intend to use the net proceeds to repay borrowings under the Credit Agreement and for general corporate purposes, including the support of organic growth opportunities.
As of September 30, 2023, we had $515 million of borrowings outstanding under the Credit Agreement. For a description of borrowings under the Credit Agreement, see “Description of Other Indebtedness.”
CAPITALIZATION
The following table sets forth our cash and cash equivalents and consolidated capitalization as of September 30, 2023 on an actual basis and on an as adjusted basis to reflect the issuance of the notes offered hereby.
This table should be read in conjunction with the section of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by reference in this prospectus, as well as our unaudited condensed consolidated financial statements and notes incorporated by reference in this prospectus.
| | | | | | | | | | | |
| As of September 30, 2023 |
| (In millions) | Actual | | As Adjusted |
| Cash and cash equivalents | $ | 1,742 | | | $ |
| Indebtedness (aggregate principal amount): | | | |
| FGLH 2025 Senior Notes | 500 | | | |
2028 Senior Notes | 550 | | | |
% Senior Notes due 2053 offered hereby | — | | | |
| Credit Agreement | 515 | | | |
| Total debt | $ | 1,565 | | | $ |
| Equity: | | | |
F&G common stock, par value $0.001 per share; as of September 30, 2023, authorized shares of 500,000,000, outstanding shares of 125,496,745 and issued shares of 126,374,176 | — | | | |
| Additional paid-in-capital | 3,178 | | | |
| Retained earnings | 2,252 | | | |
| Accumulated other comprehensive (loss) earnings | (3,040) | | | |
Treasury stock, at cost (877,431 shares as of September 30, 2023) | (18) | | | |
| Total equity | $ | 2,372 | | | $ |
Total capitalization (1) | $ | 3,937 | | | $ |
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(1)Total capitalization is defined as total equity plus total debt.
DESCRIPTION OF THE NOTES
The notes will be issued under the indenture. The following discussion summarizes selected provisions of the notes and the indenture. Because this is only a summary, it is not complete and does not describe every aspect of the notes and the indenture. Whenever there is a reference to particular sections or defined terms of the notes or the indenture, the sections or defined terms are incorporated by reference, and the statement is qualified in its entirety by that reference. Capitalized terms are terms that are defined in the notes or the indenture, as applicable. The amount of securities that the Issuer may issue under the indenture is unlimited. A copy of the indenture is available from the Issuer upon request. Investors in the notes should read the notes and the indenture for provisions that may be important to investors but which are not included in this summary.
General Terms of the Notes
The notes will mature and become payable in full, together with any accrued unpaid interest thereon, on December 15, 2053. Interest on the notes will accrue from , 2023 at the rate set forth on the cover of this prospectus (subject to adjustment from time to time as described under “—Interest Rate Adjustment upon Ratings Action”). Interest on the notes will be payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning on March 15, 2024, to the persons in whose names the notes were registered at the close of business on the preceding March 1, June 1, September 1 and December 1, respectively.
The Issuer will issue the notes initially in the aggregate principal amount of $250 million (or $287.5 million if the underwriters’ option to purchase notes to cover overallotments, if any, is exercised in full). The Issuer may, from time to time, without giving notice to or seeking the consent of the holders of the notes, issue notes under the indenture having the same ranking and the same interest rate, maturity date and other terms (other than the issue price, issue date, and date and amount of the first payment of interest) as the notes issued in this offering. Any additional notes having such similar terms, together with the notes offered hereby, will constitute a single series of notes for all purposes under the indenture, including waivers, amendments and redemptions. This type of offering is often referred to as a “re-opening.” Additional notes may constitute a separate issuance from the original series of notes offered hereby for U.S. federal income tax purposes. Additional notes that constitute a separate issuance from the original series of notes offered hereby for U.S. federal income tax purposes will be issued under a separate CUSIP number.
Interest on the notes will be computed on the basis of a 360-day year consisting of twelve 30-day months. Principal and interest will be payable, and the notes will be transferable or exchangeable, at the office or offices or agency maintained by the Issuer for this purpose. Payment of interest on the notes may be made at the Issuer’s option by check mailed to the registered holders.
Any payment otherwise required to be made in respect of the notes on a date that is not a business day for the notes may be made on the next succeeding business day with the same force and effect as if made on that date. No additional interest shall accrue as a result of a delayed payment. A business day is defined in the indenture as a day other than a Saturday, Sunday or other day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.
We intend to apply to list the notes on the NYSE under the symbol “FGN,” and if the application is approved, we expect trading in the notes on the NYSE to begin within 30 days of the original issue date. The notes will be issued only in fully registered form without coupons in minimum denominations of $25 and integral multiples of $25 in excess thereof (or other such denominations set forth in the Global Certificates (as defined under “—Book-Entry, Delivery and Form”)). No service charge will be made for any transfer or exchange of the notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange. The notes will be represented by one or more Global Certificates registered in the name of a nominee of DTC. Except as described below under “—Transfer and Exchange—Exchange of Beneficial Interests in Notes represented by Global Certificates for Notes represented by Definitive Certificates,” the notes will not initially be issuable in definitive form.
The Issuer will initially appoint the trustee at its designated corporate trust office as a paying agent and registrar for the notes. The Issuer will cause to be kept at the designated office of the registrar a register in which, subject to
such reasonable regulations as the Issuer may prescribe, the Issuer will provide for the registration of the notes and registration of transfers of the notes. The Issuer will maintain an office or agency where security certificates representing the notes may be presented for payment of principal of and interest, if any, and where security certificates representing the notes may be presented for registration of transfer and for exchange. The Issuer will give the trustee written notice of the location of such office or agency and of any change of location thereof. If the Issuer fails to designate or maintain any such office or agency or fails to give such notice of the location or of any change in the location thereof to the trustee, presentations for payment may be made at the designated corporate trust office of the trustee.
The Issuer will provide investors in the notes with notice of any resignation or removal of the trustee and of any appointment of a successor trustee.
General Terms of the Guarantees
As of the closing of this offering, the notes will be fully and unconditionally guaranteed, jointly and severally, by all of the subsidiaries of the Issuer that are guarantors of the Issuer’s obligations under the Credit Agreement, which will be FGL US Holdings, FGLH, FGLBS and CF Bermuda. If, after the date of the indenture, any subsidiary guarantees (or becomes a co-borrower or co-issuer in respect of) the Issuer’s obligations under the Credit Agreement, within 15 days of such event, the Issuer shall cause such subsidiary to become a guarantor under the indenture. See “—Additional Guarantees.” None of the Issuer’s insurance subsidiaries will guarantee the notes.
The obligations of each guarantor under its guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such guarantor and after giving effect to any collections from or payments made by or on behalf of any other guarantor in respect of the obligations of such other guarantor under its guarantee or pursuant to its contribution obligations under the indenture, result in the obligations of such guarantor under its guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. By virtue of this limitation, a guarantor’s obligation under its guarantee of the notes could be significantly less than amounts due and payable with respect to the notes, or a guarantor may have no obligation under its guarantee of the notes. Each guarantor that makes a payment for distribution under its guarantee is entitled to a contribution from each other guarantor in a pro rata amount based on the adjusted net assets of each guarantor. See “Risk Factors—Risks Factors Related to the Notes — Federal and state laws may permit courts, under specific circumstances, to void the notes and/or any of the guarantees as a fraudulent transfer or conveyance, subordinate claims in respect of the notes and/or any of the guarantees and require you to return payments received. If that occurs, you may not receive any payments on the notes or any of the guarantees.” The guarantee of a guarantor will be released:
•upon any sale or other disposition (by merger, amalgamation, consolidation or otherwise) of (i) all or substantially all of the assets of that guarantor or (ii) the capital stock (as defined under “—Certain Definitions”) of such guarantor, in each case, after which that guarantor is no longer a subsidiary of the Issuer; provided, that such sale or other disposition is made in compliance with the covenants described in “—Limitation on Disposition of Capital Stock of the Issuer’s Covered Subsidiaries” and “—Consolidation, Merger, Sale or Conveyance—The Guarantors”;
•if such guarantor merges with and into the Issuer or another guarantor, with the Issuer or such other guarantor surviving such merger;
•if the Issuer exercises its legal defeasance option or covenant defeasance option as described under “—Defeasance” or if the Issuer’s and the guarantors’ obligations under the indenture are discharged; or
•upon the release or discharge of the guarantee by such guarantor of indebtedness under the Credit Agreement, except, in each case, a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that, if any such guarantee is so reinstated, such guarantee shall also be reinstated to the extent that such guarantor would then be required to provide a guarantee pursuant to the covenant described under “—Additional Guarantees”).
Interest Rate Adjustment upon Ratings Action
The interest rate payable on the notes will be subject to adjustment from time to time if either S&P or Fitch (each as defined under “—Certain Definitions”) or, in either case, any Substitute Rating Agency downgrades (or downgrades and subsequently upgrades) the credit ratings assigned to the notes, in the manner described below.
If the rating assigned by S&P (or any Substitute Rating Agency therefor) of the notes is downgraded to a rating set forth in the immediately following table, the interest rate on the notes will increase from the interest rate payable thereon on the date of their initial issuance by an amount equal to the percentage set forth opposite the rating in the table below (plus, if applicable, the percentage set forth opposite the rating in the table following the succeeding paragraph):
| | | | | |
S&P Rating(1) | Percentage |
| BB+ | 0.25 | % |
| BB | 0.50 | % |
| BB- | 0.75 | % |
| B+ or below | 1.00 | % |
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(1)Including the equivalent ratings of any Substitute Rating Agency therefor.
If the rating assigned by Fitch (or any Substitute Rating Agency therefor) of the notes is downgraded to a rating set forth in the immediately following table, the interest rate on the notes will increase from the interest rate payable thereon on the date of their initial issuance by an amount equal to the percentage set forth opposite the rating in the table below (plus, if applicable, the percentage set forth opposite the rating in the table following the preceding paragraph):
| | | | | |
Fitch Rating(1) | Percentage |
| BB+ | 0.25 | % |
| BB | 0.50 | % |
| BB- | 0.75 | % |
| B+ or below | 1.00 | % |
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(1)Including the equivalent ratings of any Substitute Rating Agency therefor.
If at any time the interest rate on the notes has been increased and S&P or Fitch (or, in either case, any Substitute Rating Agency) subsequently upgrades its rating of the notes to any of the ratings set forth above, the interest rate on the notes will be decreased such that the interest rate on the notes equals the interest rate payable on the notes on the date of their initial issuance plus the percentages set forth opposite the ratings from the tables above in effect immediately following the upgrade in rating. If S&P and Fitch (or, in either case, any Substitute Rating Agency) subsequently upgrade their respective ratings of the notes to BBB- (or its equivalent, in the case of any Substitute Rating Agency) or higher, the interest rate on the notes will be decreased to the interest rate payable thereon on the date of their initial issuance (and if one such upgrade occurs and the other does not, the interest rate on the notes will be decreased so that it does not reflect any increase of interest rate attributable to the upgrading rating agency). In addition, the interest rate payable on the notes will permanently cease to be subject to any adjustment described above (notwithstanding any subsequent downgrade in the ratings by either or both rating agencies) if the notes become rated BBB+ (or the equivalent thereof, in the case of any Substitute Rating Agency) or higher by each of S&P and Fitch (or, in either case, a Substitute Rating Agency) (or by one rating agency if the notes are only rated by one rating agency and the Issuer has not obtained a rating on the notes from a Substitute Rating Agency).
Each adjustment required by any downgrade or upgrade in a rating set forth above, whether occasioned by the action of S&P or Fitch (or, in either case, any Substitute Rating Agency), will be made independent of any and all other adjustments; provided, however, that in no event shall (1) the interest rate on the notes be reduced to below the
interest rate payable thereon on the date of their initial issuance or (2) the total increase in the interest rate on the notes exceed 2.00% above the interest rate payable thereon on the date of their initial issuance.
No adjustments to the interest rate on the notes will be made solely as a result of a rating agency ceasing to provide a rating of the notes. If at any time S&P or Fitch ceases to provide a rating of the notes for any reason, the Issuer will use its commercially reasonable efforts to obtain a rating of the notes from a Substitute Rating Agency, if one exists, in which case, for purposes of determining any increase or decrease in the interest rate on the notes pursuant to the tables above, (a) such Substitute Rating Agency will be substituted for the last rating agency to provide a rating of the notes but which has since ceased to provide such rating, (b) the relative rating scale used by such Substitute Rating Agency to assign ratings to senior unsecured debt will be determined in good faith by an independent investment banking institution of national standing appointed by the Issuer and, for purposes of determining the applicable ratings included in the applicable table above with respect to such Substitute Rating Agency, such ratings will be deemed to be the equivalent ratings used by S&P or Fitch, as applicable, in such table and (c) the interest rate on the notes will increase or decrease, as the case may be, such that the interest rate on the notes equals the interest rate payable on the notes on the date of their initial issuance plus the appropriate percentage, if any, set forth opposite the deemed equivalent rating from such Substitute Rating Agency in the applicable table above (taking into account the provisions of clause (b) above) (plus any applicable percentage resulting from a decreased rating by the other rating agency).
For so long as only one of S&P or Fitch provides a rating of the notes and the Issuer does not select a Substitute Rating Agency to replace the other rating agency, any subsequent increase or decrease in the interest rate on the notes necessitated by a downgrade or upgrade in the applicable rating by the rating agency providing the rating shall be twice the applicable percentage set forth in the applicable table above (taking into account the provisions of clause (b) from the immediately preceding paragraph, if applicable). For so long as none of S&P, Fitch or a Substitute Rating Agency provides a rating of the notes, the interest rate on the notes will increase to, or remain at, as the case may be, 2.00% above the interest rate payable on the notes on the date of their initial issuance.
Any interest rate increase or decrease on the notes described above will take effect on the next business day following the date on which a rating change occurs that requires an adjustment in the interest rate on the notes. If the interest rate payable on the notes is increased as described above, the term “interest,” as used with respect to the notes, will be deemed to include any such additional interest, unless the context otherwise requires.
Ranking
The notes and the guarantees will be the senior unsecured obligations of the Issuer and the guarantors and will rank senior in right of payment to all of the obligations of the Issuer and the guarantors that are expressly subordinated in right of payment to the notes and each guarantee and equally in right of payment with all of the existing and future senior unsecured indebtedness of the Issuer and the guarantors, including the obligations of the Issuer and the guarantors under the 2028 Senior Notes, the Credit Agreement, the FGLH 2025 Senior Notes and the FNF Credit Agreement, as applicable. In addition, the notes and guarantees will effectively rank junior in right of payment to any future secured indebtedness of the Issuer or the guarantors to the extent of the value of the assets securing such indebtedness. As of September 30, 2023, the Issuer and the guarantors had no secured indebtedness that would have effectively ranked senior in right of payment to the notes and the guarantees, $1.6 billion of unsecured indebtedness that would have ranked equally in right of payment with the notes and the guarantees and no subordinated indebtedness that would have ranked junior in right of payment to the notes and the guarantees.
The Issuer is a holding company and conducts substantially all of its operations through its subsidiaries, including FGL Insurance and FGL NY Insurance. The notes will be guaranteed by each of the Issuer’s existing and future direct and indirect subsidiaries that are guarantors of the Issuer’s obligations under the Credit Agreement. The notes will not be guaranteed by any of the Issuer’s other subsidiaries, including its insurance subsidiaries. As a result, claims of the holders of the notes and the guarantees will be structurally subordinated to all indebtedness, other liabilities (including liabilities to policyholders and contract holders) and preferred equity of the Issuer’s and the guarantors’ subsidiaries that are not guarantors. The indenture contains no limitations on the amount of additional indebtedness that the Issuer and the guarantors may incur, and therefore the amount of such indebtedness could be substantial and, subject to the limitations set forth in the covenant described under “—Certain Covenants of
the Issuer—Limitation on Liens on Capital Stock of the Issuer’s Covered Subsidiaries,” such indebtedness may be secured indebtedness. Therefore, in the event of the liquidation, dissolution, winding up or other bankruptcy event of a subsidiary that is not a guarantor, following payment by such subsidiary of its indebtedness, other liabilities and preferred equity, such subsidiary may not have sufficient assets remaining in order to make payments to the Issuer, as a shareholder or otherwise. In addition, assets of the Issuer could be made available to satisfy claims of FGL Insurance’s policyholders, as discussed under “Risk Factors—Risk Factors Related to this Offering and the Notes—We are subject to statutory provisions under which our assets could be used to satisfy claims of FGL Insurance’s policyholders.” As of September 30, 2023, our non-guarantor subsidiaries had no aggregate indebtedness, and our insurance subsidiaries had $52.1 billion in aggregate liabilities to policyholders and contract holders, which would have effectively ranked senior to the notes and the guarantees. Additional Amounts
All payments made by or on behalf of a foreign guarantor (as defined under “—Certain Definitions”) under or with respect to the notes or its guarantee will be made free and clear of, and without withholding or deduction for, or on account of, any present or future taxes, unless the withholding or deduction of such taxes is then required by law. If any withholding or deduction for, or on account of, any taxes imposed or levied by or on behalf of any Tax Jurisdiction (as defined under “—Certain Definitions”) will at any time be required to be made from any payments made by or on behalf of any foreign guarantor with respect to any guarantee, including, without limitation, payments of principal, premium, or interest, the foreign guarantor will pay such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts received in respect of such payments (including Additional Amounts) after such withholding or deduction will equal the respective amounts that would have been received in respect of such payments in the absence of such withholding or deduction; provided, however, that no Additional Amounts will be payable with respect to:
(1)any taxes that would not have been imposed but for the holder or beneficial owner of the notes being a citizen, resident or national of, or incorporated in or carrying on a business in, the relevant Tax Jurisdiction in which such taxes are imposed, or having any other present or former connection with the relevant Tax Jurisdiction in which such taxes are imposed, other than by the mere acquisition or holding of any note or the enforcement or receipt of payment under or in respect of any note or any guarantee;
(2)any taxes imposed or withheld as a result of the failure of the holder or beneficial owner of the notes to comply with any reasonable written request made to such holder in writing at least 30 days before any such withholding or deduction would be payable by any foreign guarantors to provide timely or accurate information concerning the nationality, residence or identity of such holder or to make any valid or timely declaration or similar claim or satisfy any certification, information or other reporting requirements (to the extent such holder or beneficial owner is legally eligible to do so), which is required or imposed by a statute, treaty, regulation or administrative practice of the relevant Tax Jurisdiction as a precondition to exemption from, or reduction in the rate of withholding or deduction of, such taxes;
(3)any taxes that are imposed or withheld as a result of the presentation of any note for payment (where presentation is required under the indenture) more than 30 days after the relevant payment is first made available for payment to the holder (except to the extent that the holder would have been entitled to Additional Amounts had the note been presented on the last day of such 30 day period);
(4)any estate, inheritance, gift, sale, transfer, use, personal property tax or similar tax or assessment;
(5)any tax which is payable otherwise than by withholding or deduction from payments made under or with respect to the notes or any guarantee;
(6)any tax that was imposed with respect to any payment on a note to any holder who is a fiduciary partnership, limited liability company or any person other than the sole beneficial owner of such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or limited liability company or the beneficial owner of such payment would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual holder of such note;
(7)any taxes that are imposed or withheld pursuant to Sections 1471 through 1474 of the Code (as defined under “U.S. Federal Income Tax Consequences”) as of the issue date of the notes (or any amended or successor version of such sections), any regulations promulgated thereunder, any official interpretations thereof, any similar law or regulation adopted pursuant to an intergovernmental agreement between a non-U.S. jurisdiction and the United States with respect to the foregoing or any agreements entered into pursuant to Section 1471(b)(1) of the Code; or
(8)any combination of items (1) through (7) above.
In addition to the foregoing, any foreign guarantor will pay and indemnify the holder for any present or future stamp, issue, registration, transfer, court or documentary taxes, or any other excise or property taxes, charges or similar levies or taxes levied by any jurisdiction on the execution, delivery, registration or enforcement of any of the notes, any guarantee (other than on or in connection with a transfer of the notes other than the initial sale thereof by the underwriters) or any other document or instrument referred to therein, or the receipt of any payments with respect thereto.
If any foreign guarantor becomes aware that it will be obligated to pay Additional Amounts with respect to any payment under or with respect to the notes or its guarantee, the relevant foreign guarantor will deliver to the trustee on a date at least 30 days prior to the date of such payment (unless the obligation to pay Additional Amounts arises after the 30th day prior to the date of such payment, in which case the relevant foreign guarantor shall notify the trustee promptly thereafter) an officer’s certificate stating the fact that Additional Amounts will be payable and the amount estimated to be so payable. The officer’s certificate must also set forth any other information reasonably necessary to enable the paying agent to pay Additional Amounts on the relevant payment date. The trustee shall be entitled to rely solely on such officer’s certificate as conclusive proof that such payments are necessary. The relevant foreign guarantor will provide the trustee with documentation reasonably satisfactory to the trustee evidencing the payment of Additional Amounts.
The relevant foreign guarantor will make all withholdings and deductions required by law and will remit the full amount deducted or withheld to the relevant tax authority in accordance with applicable law. The relevant foreign guarantor will use its reasonable efforts to obtain tax receipts from each tax authority evidencing the payment of any taxes so withheld or deducted. The relevant foreign guarantor will furnish to the holders of notes, within 60 days after the date the payment of any taxes so withheld or deducted is made, certified copies of tax receipts evidencing payment by the foreign guarantor or if, notwithstanding such entity’s efforts to obtain receipts, receipts are not obtained, other evidence of payments by such entity.
References to the payment of amounts based on the principal amount, interest of any other amount payable under, or with respect to, any of the notes, shall be deemed to include the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
The above obligation will survive any termination, defeasance or discharge of the indenture or any transfer by a holder of its notes, and will apply, mutatis mutandis, to any Tax Jurisdiction applicable to any successor person to any foreign guarantor.
Tax Event Redemption
The Issuer may redeem the notes at its option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest thereon to, but excluding, the date fixed by the Issuer for such redemption (such date, a “Tax Redemption Date”) and all Additional Amounts, if any, then due and that will become due on the Tax Redemption Date as a result of such redemption or otherwise, if on the next date on which any amount would be payable in respect of the guarantees, (i) the relevant foreign guarantor is or would be required to pay Additional Amounts, (ii) the payment giving rise to such requirement cannot be made by the Issuer or another guarantor without the obligation to pay Additional Amounts and (iii) the relevant foreign guarantor cannot avoid any such payment obligation by taking reasonable measures available as a result of:
(a)any change in, or amendment to, the laws (or any regulations, protocols or rulings promulgated thereunder) of the relevant Tax Jurisdiction affecting taxation which change or amendment has not
been publicly announced before and which becomes effective on or after the date of this prospectus (or, if the relevant Tax Jurisdiction was not a Tax Jurisdiction on the issue date of the notes, the date on which such Tax Jurisdiction became a Tax Jurisdiction under the indenture); or
(b)any change in, or amendment to, the existing official written position or the introduction of a written official position regarding the application, administration or interpretation of such laws, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction or a change in published administrative practice), which change, amendment, application or interpretation has not been publicly announced and becomes effective on or after the date of this prospectus (or, if the relevant Tax Jurisdiction was not a Tax Jurisdiction on the issue date of the notes, the date on which such Tax Jurisdiction became a Tax Jurisdiction under the indenture).
Notice of any such redemption will be provided to each holder of notes to be redeemed in accordance with the procedures described under “—Optional Redemption”, provided, that the Issuer will not give any such notice of redemption earlier than 30 days prior to the earliest date on which the relevant foreign guarantor would be obligated to make such payment or withholding if a payment under or in respect of the notes or the guarantees were then due, and unless at the time such notice is given, the obligation to pay Additional Amounts remains in effect.
Prior to the furnishing of any notice of redemption pursuant to the immediately preceding paragraph, the Issuer will deliver the trustee an opinion of counsel to the effect that there has been such change or amendment described in paragraphs (a) and/or (b) above which would entitle the Issuer to redeem the notes. In addition, before the Issuer furnishes the notice of redemption to each holder of notes to be redeemed pursuant to the immediately preceding paragraph, it will deliver to the trustee an officer’s certificate to the effect that the obligation to pay Additional Amounts cannot be avoided by the relevant foreign guarantor (but only if the payment giving rise to such requirement cannot be made by the Issuer or another guarantor without the obligation to pay Additional Amounts) taking reasonable measures available to it.
The trustee will accept such officer’s certificate and opinion of counsel as sufficient evidence of the existence and satisfaction of the conditions precedent as described above, in which event it will be conclusive and binding on the holders of the notes.
Optional Redemption
Except as described under “—Tax Event Redemption,” the notes may not be redeemed by the Issuer, at the Issuer’s option, prior to the Par Call Date. On or after the Par Call Date, the Issuer may redeem the notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.
Notice of any redemption will be mailed or electronically delivered (or otherwise transmitted in accordance with the depositary’s procedures) at least 15 days but not more than 60 days before the redemption date to each holder of notes to be redeemed. Notice of any redemption of notes may, at the Issuer’s discretion, be given subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction that is pending (such as an equity or equity-linked offering, an incurrence of indebtedness or an acquisition or other strategic transaction involving a change of control of the Issuer). If the redemption or notice of redemption is subject to the satisfaction of one or more conditions precedent, the notice of redemption must describe the conditions and, if applicable, state that the redemption date may be delayed at the Issuer’s discretion until such conditions are satisfied or waived by the Issuer or that, if such conditions are not so satisfied or waived, the redemption may not occur and the redemption notice may be rescinded.
In the case of a partial redemption, selection of the notes for redemption will be made by lot or by such other method as the trustee deems to be fair and appropriate. The notes may be redeemed in part in minimum denominations of $25 and integral multiples of $25 in excess thereof. If any note is to be redeemed in part only, the notice of redemption that relates to the note will state the portion of the principal amount of the note to be redeemed. A new note in a principal amount equal to the unredeemed portion of the note will be issued in the name of the holder of the note upon surrender for cancellation of the original note. For so long as the notes are held by DTC (or
another depositary), the redemption of the notes shall be done in accordance with the policies and procedures of the depositary.
Unless the Issuer defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the notes or portions thereof called for redemption.
The notes will not be entitled to the benefit of any mandatory redemption or sinking fund.
Repurchase upon Change of Control Triggering Event
If a Change of Control Triggering Event with respect to the notes occurs, unless the Issuer has exercised its right to redeem such notes as described under “—Optional Redemption,” the Issuer will be required to make an offer to repurchase all or, at the holder’s option, any part (equal to $25 or an integral multiple of $25 in excess thereof) of such holder’s notes on the terms set forth in the indenture (a “Change of Control Offer”). In such Change of Control Offer, the Issuer will be required to offer a payment in cash equal to 101% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest thereon (the “Change of Control Payment”) to, but excluding, the repurchase date (the “Change of Control Payment Date”).
Within 30 days following the date of any Change of Control Triggering Event with respect to the notes or, at the Issuer’s option, prior to any Change of Control with respect to the notes but after the public announcement of the transaction or transactions that constitutes or may constitute a Change of Control with respect to the notes, the Issuer will mail a notice to each holder (with a copy to the trustee) describing the transaction or transactions that constitute or will constitute such Change of Control Triggering Event and offering to repurchase the notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the indenture and described in such notice. The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to repurchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control Triggering Event provisions of the indenture, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Triggering Event provisions of the indenture by virtue of such compliance.
On the Change of Control Payment Date, the Issuer will, to the extent lawful:
•accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
•deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and
•deliver or cause to be delivered to the trustee the notes properly accepted, together with an officer’s certificate stating the aggregate principal amount of notes or portions of notes being repurchased by the Issuer.
The paying agent for the notes will promptly mail to each holder of notes properly tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each such holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided, that each such new note will be in a principal amount of $25 or an integral multiple of $25 in excess thereof.
The Issuer will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer and such third party purchases all notes properly tendered and not withdrawn under
its offer. In the event that such third party terminates or defaults on its offer, the Issuer will be required to make a Change of Control Offer, treating the date of such termination or default as though it were the date of the Change of Control Triggering Event. In addition, the Issuer will not purchase any notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default (as defined under “—Events of Default”), other than a default in the payment of the Change of Control Payment.
Book-Entry, Delivery and Form
Global Certificates. The notes will be issued in book-entry form and initially will be represented by one or more security certificates in fully registered, global form without interest coupons (the “Global Certificates”). Notes represented by the Global Certificates will be registered in the name of Cede & Co., as registered owner and as nominee for DTC, for credit to an account of a direct or indirect participant in DTC as described below under “—Depositary Procedures.”
DTC will act as securities depositary for the Global Certificates. Purchases of beneficial interests in the Global Certificates will be made in book-entry form. Except in the limited circumstances described below, beneficial interests in the Global Certificates may not be exchanged for notes in definitive form, and owners of beneficial interests in Global Certificates will not receive certificates representing their beneficial interests in the Global Certificates. See “—Depositary Procedures” below.
Depositary Procedures. The information in this section concerning DTC, Euroclear, Clearstream and their respective procedures have been obtained from sources that the Issuer and trustee believe to be reliable, but neither the Issuer nor the trustee takes responsibility for its accuracy.
Upon the issuance of the Global Certificates, DTC or its custodian will credit, on its internal system, the respective principal amount of the individual beneficial interests represented by the Global Certificates to the accounts of persons who have accounts with such depositary. Such accounts initially will be designated by or on behalf of the underwriters. Ownership of beneficial interests in the Global Certificates will be limited to persons who have accounts with DTC (“participants”) or persons who hold interests through participants. Ownership of beneficial interests in the Global Certificates will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interest of persons other than participants).
DTC. DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly (“indirect participants”). The rules applicable to DTC and its participants are on file with the SEC.
All interests in a Global Certificate, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. In the event of physical delivery of the notes represented by a definitive certificate (“Definitive Certificates”), the laws of some states require that certain persons take physical delivery in certificated form of securities that they own. Consequently, the ability to transfer beneficial interests in the notes represented by a Global Certificate to such persons will be limited to that extent. Because DTC can act only on behalf of its participants, which in turn act on behalf of indirect participants and certain banks, the ability of a person having a beneficial interest in a Global Certificate to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such beneficial interest, may be affected by the lack of a physical certificate evidencing such interest.
Except as provided below, owners of beneficial interests in the Global Certificates will not be entitled to have such Global Certificates, or any notes represented thereby, registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form, and will not be considered the registered owners or holders of such Global Certificates, or any notes represented thereby.
Any payments of principal, premium (if any) or interest due on the notes on any interest payment date or at maturity or upon redemption will be made available by the Issuer to the trustee by such date and as soon as possible thereafter will be payable by the trustee or paying agent to DTC or its nominee in its capacity as the registered holder of the notes represented by the Global Certificates. The trustee will treat the persons in whose names the notes represented by the Global Certificates are registered as the owners thereof for the purpose of receiving such payments and for all other purposes. Consequently, neither the trustee nor any agent thereof nor the Issuer has or will have any responsibility or liability for (i) any aspect of DTC’s records or any participant’s or indirect participant’s records relating to or payments made on account of beneficial ownership interests in the notes represented by the Global Certificates, or for maintaining, supervising or reviewing any of DTC’s records or any participant’s or indirect participant’s records relating to the beneficial ownership interests in the notes represented by the Global Certificates or (ii) any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.
DTC has advised the Issuer that its current practice, upon receipt of any payment in respect of securities, is to credit the accounts of the relevant participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Payments by DTC’s participants and indirect participants to the beneficial owners of the notes will be governed by standing instructions and customary practices and will be the responsibility of the participants or the indirect participants rather than of DTC or the trustee.
Euroclear. Euroclear was created in 1968 to hold securities for its participants and to clear and settle transactions between its participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear provides various other services, including securities lending and borrowing, and interfaces with domestic markets in several countries. Euroclear is owned by Euroclear Clearance System Public Limited Company and operated through a license agreement by Euroclear Bank, S.A./N.V., known as the Euroclear Operator. All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator. Euroclear participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the underwriters. Indirect access to Euroclear is also available to others that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.
The Euroclear Operator was granted a banking license by the Belgian Banking and Finance Commission in 2000, authorizing it to carry out banking activities on a global basis. It took over operation of Euroclear from the Brussels, Belgium office of Morgan Guaranty Trust Company of New York on December 31, 2000.
Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (the “Terms and Conditions”). The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants.
Distributions with respect to notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear participants in accordance with the Terms and Conditions, to the extent received by Euroclear.
Clearstream. Clearstream is incorporated under the laws of The Grand Duchy of Luxembourg as a professional depositary. Clearstream holds securities for its participants and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and
securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Monetary Institute. Clearstream participants are financial institutions around the world, including securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters. Indirect access to Clearstream is also available to others that clear through or maintain a custodial relationship with a Clearstream participant either directly or indirectly.
Distributions with respect to notes held beneficially through Clearstream will be credited to cash accounts of Clearstream participants in accordance with its rules and procedures, to the extent received by Clearstream.
Transfer and Exchange
Beneficial Interests in Notes Represented by Global Certificates. Transfers between DTC participants will be effected in accordance with DTC’s procedures, and will be settled in same-day funds. The laws of some states require that certain persons take physical delivery of securities in definitive form. Because DTC can only act on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of a person having a beneficial interest in a note to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate evidencing such interest. Transfers between participants in Euroclear or Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.
Cross-market transfers between DTC participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Certificates in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositaries for Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Certificate from a DTC participant will be credited during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the DTC settlement date and such credit of any transactions in interests in a Global Certificate settled during such processing day will be reported to the relevant Euroclear or Clearstream participant on such day. Cash received in Euroclear or Clearstream as a result of sales of interests in a Global Certificate by or through a Euroclear or Clearstream participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account only as of the Business Day following settlement in DTC.
DTC has advised the Issuer that it will take any action permitted to be taken by a holder of the Global Certificates only at the direction of one or more participants to whose account with DTC interests in the Global Certificates are credited and only in respect of such portion of the aggregate principal amount of the notes as to which such participant or participants has or have given such direction.
Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the notes represented by the Global Certificates among participants in DTC, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Issuer nor the trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Transfers of Beneficial Interests in Notes Represented by Global Certificates. Exchanges of beneficial interests in the notes represented by one Global Certificate for interests in notes represented by another Global Certificate will be subject to the applicable rules and procedures of DTC and its direct and indirect participants. Any beneficial interest in the Global Certificates that is transferred to a person who takes delivery in the form of an
interest in another Global Certificate will, upon transfer, cease to be an interest in that Global Certificate and become an interest in the Global Certificate to which the beneficial interest is transferred and, accordingly, will thereafter be subject to all procedures applicable to beneficial interests in the notes represented by the Global Certificate to which the beneficial interest is transferred for as long as it remains an interest in that Global Certificates.
Exchange of Beneficial Interests in Notes Represented by Global Certificates for Notes Represented by Definitive Certificates. For so long as DTC or its nominee is the registered holder of the notes represented by a Global Certificate, DTC or such nominee will be considered the sole and exclusive holder and owner of the notes represented by such Global Certificate for all purposes under the indenture and the notes. The Issuer will exchange Global Certificates representing the notes for Definitive Certificates only if:
•DTC notifies the Issuer that it is unwilling or unable to continue as depositary for the Global Certificates or has ceased to be a clearing agency registered under the Exchange Act, and, in either case, the Issuer fails to appoint a successor depositary within 90 days of receiving such notice;
•an event described below under “—Events of Default” with respect to the notes has occurred and is continuing; or
•the Issuer, in its sole discretion and subject to DTC’s customary procedures, notifies the trustee in writing that it elects to cause the issuance of Definitive Certificates under the indenture.
Certain Covenants of the Issuer
The Issuer has agreed to some restrictions on the Issuer’s and the guarantors’ activities for the benefit of holders of the notes. The restrictive covenants summarized below will apply, unless the covenants are waived or amended, so long as any of the notes are outstanding.
Other than the covenants described in “—Consolidation, Merger, Sale or Conveyance,” “—Limitation on Liens on Capital Stock of the Issuer’s Covered Subsidiaries” and “—Limitation on Disposition of Capital Stock of the Issuer’s Covered Subsidiaries” below, the indenture and the notes do not contain other provisions that afford holders of the notes protection in the event the Issuer:
•subject to the provisions described under “—Repurchase upon Change of Control Triggering Event,” engages in a change of control transaction;
•subject to the covenant described in “—Limitation on Liens on Capital Stock of the Issuer’s Covered Subsidiaries,” issues secured debt or secures existing unsecured debt;
•issues debt securities or otherwise incurs additional unsecured indebtedness or other obligations;
•purchases or redeems or makes any payments in respect of capital stock or other securities ranking junior in right of payment to the notes;
•sells assets;
•pays dividends;
•enters into transactions with related parties; or
•conducts other similar transactions that may adversely affect the holders of the notes.
See “Risk Factors—Risk Factors Related to this Offering and the Notes—The indenture contains only limited protection for holders of the notes and, except in certain limited circumstances, will not restrict the Issuer’s ability to incur additional debt, repurchase its securities or take other actions that could negatively impact holders of the notes” for a further discussion of the limited protections provided to holders of the notes.
Certain Definitions
Set forth below are certain of the defined terms used in the indenture:
“Below Investment Grade Rating Event” with respect to the notes means that the respective ratings of the notes are downgraded from an Investment Grade Rating by each of the Rating Agencies to below an Investment Grade Rating by each of the Rating Agencies on any date during the period commencing upon the first public notice of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control and ending 60 days following public notice of the occurrence of the related Change of Control (which 60-day period shall be extended so long as the respective ratings of the notes are under publicly announced consideration for possible downgrade by either of the Rating Agencies); provided, that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in ratings shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of “Change of Control Triggering Event” hereunder) if the Rating Agencies making the reduction in ratings to which this definition would otherwise apply do not announce or publicly confirm or inform the holders of the notes in writing at their request that the reduction was the result, in whole or in part, of any event or circumstance comprising or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).
“capital stock” of any person means any and all share capital, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such person, including preferred stock, but excluding any debt securities convertible into such equity.
“Change of Control” means the occurrence of any of the following:
•the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its subsidiaries taken as a whole to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”) other than to one or more Permitted Holders, the Issuer or one of its subsidiaries;
•the approval by the holders of the Issuer’s common stock of any plan or proposal for the liquidation or dissolution of the Issuer; or
•the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any Person or Group, other than a Permitted Holder, becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Issuer’s Voting Stock.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Issuer (or its successor) becomes a direct or indirect wholly owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Issuer’s Voting Stock immediately prior to that transaction or (B) immediately following that transaction, no Person or Group (other than a Permitted Holder or a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly of more than 50% of the Voting Stock of such holding company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event in respect of such Change of Control.
“Covered Guarantor” means any guarantor that is a Covered Subsidiary.
“Covered Subsidiary” means any subsidiary of the Issuer, the total assets of which constitute at least 10% of the total assets of the Issuer and its consolidated subsidiaries (including that subsidiary), based on the most recent quarterly (including fiscal year-end) balance sheet of the subsidiary and on the most recent quarterly (including fiscal year-end) consolidated balance sheet of the Issuer. As of the date of this prospectus, CF Bermuda, FGL US
Holdings, FGLH, FGL Insurance and F&G Life Re are the Issuer’s only subsidiaries that meet the definition of Covered Subsidiary.
“Credit Agreement” means that certain Credit Agreement, dated as of November 22, 2022, among the Issuer, the guarantors from time to time party thereto and the banks and other financial institutions from time to time parties thereto as agents and lenders, and any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as it may be further amended, restated, modified, renewed, refunded, replaced or refinanced from time to time.
“Fitch” means Fitch Ratings, Inc. and its successors.
“foreign guarantor” means any guarantor that is organized or existing under the laws of, or otherwise treated as resident for tax purposes in, a jurisdiction other than the United States, any state thereof or the District of Columbia.
“guarantee” means, individually, any guarantee of payment of the notes by a guarantor pursuant to the terms of the indenture and any supplemental indenture thereto, and, collectively, all such guarantees. Each guarantee will be in the form prescribed by the indenture.
“guarantor” means:
(1)each subsidiary of the Issuer on the date of the indenture that guarantees indebtedness of the Issuer under the Credit Agreement and is a signatory to the indenture; and
(2)any subsidiary that executes a supplemental indenture in accordance with the provisions of the indenture as described under “—Additional Guarantees”;
and their respective successors and assigns, in each case, until such person is released from its guarantee in accordance with the terms of the indenture.
“Investment Grade Rating” means a rating equal to or higher than BBB- (or the equivalent) by S&P and Fitch, respectively, or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Issuer.
“lien” means any mortgage, pledge, lien, security interest or other encumbrance.
“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.
“Permitted Holder” means any or a combination of any of:
(1)Fidelity National Financial, Inc. (or its successor);
(2)any affiliate or related party of any Person specified in clause (1); and
(3)any Person both the capital stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) are owned 50% or more by Persons specified in clauses (1) and (2) or any Group in which the Persons specified in clauses (1) and (2) own more than a majority of the voting power of the Voting Stock held by such Group, and any Person that is a member of any such Group.
“permitted lien” means (i) liens on the capital stock of a Covered Subsidiary to secure indebtedness incurred to finance the purchase price of such capital stock; (ii) liens on the capital stock of a Covered Subsidiary existing at the time such person becomes a Covered Subsidiary (including, without limitation, by merger into or consolidation with the Issuer or a Covered Subsidiary); provided, that any such lien is not incurred in anticipation of such person becoming a Covered Subsidiary; (iii) liens on the capital stock of a Covered Subsidiary to secure indebtedness to the Issuer or a Covered Subsidiary; provided, that such indebtedness is owned or held by the Issuer or a Covered Subsidiary; and (iv) extensions, renewals, refinancings or replacements of any lien referred to in the foregoing clauses (i), (ii) and (iii); provided, however, that any liens permitted by any of the foregoing clauses (i) and (ii) shall not extend to or cover any additional capital stock of a Covered Subsidiary, other than the property that previously secured such lien.
“Person” means any individual, firm, limited liability company, corporation, partnership, association, joint venture, tribunal, trust, government or political subdivision or agency or instrumentality thereof, or any other entity or organization and includes a “person” as used in Section 13(d)(3) of the Exchange Act.
“Rating Agencies” means (1) each of S&P and Fitch and their respective successors; and (2) if either of S&P or Fitch ceases to rate the notes or fails to make a rating of the notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act, that the Issuer selects (as certified by an officer of the Issuer to the trustee) as a replacement agency for S&P or Fitch, respectively, as the case may be.
“S&P” means S&P Global Ratings Services (a division of S&P Global Inc.) and its successors.
“Substitute Rating Agency” means Moody’s, as selected by the Issuer in its discretion at any time and from time to time as a replacement agency for S&P or Fitch, respectively, as the case may be, as certified to the trustee by a resolution of the Issuer’s board of directors.
“Tax Jurisdiction” means any jurisdiction in which any foreign guarantor is then incorporated, organized, engaged in business or resident for tax purposes, any political subdivision or governmental authority thereof or therein having power to tax or any jurisdiction from or through which payment under or with respect to the notes or the guarantees is made, excluding the United States and any political subdivision thereof.
“Voting Stock” of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote generally in the election of the board of directors of such Person.
Consolidation, Merger, Sale or Conveyance
The Issuer. As long as any notes are outstanding, the Issuer may not (i) consolidate with or merge into any other person, or convey, transfer, sell, or lease or otherwise dispose of the Issuer’s properties and assets substantially as an entirety, in one or more related transactions, to any person or (ii) permit any person to consolidate with or merge into the Issuer, unless:
•(a) the Issuer is the surviving entity or (b) if the Issuer is not the surviving entity, the person formed by the consolidation or into which the Issuer is merged or the person to which the Issuer’s properties and assets are so conveyed, transferred, sold, assigned or leased, shall be a corporation, partnership, limited liability company, limited liability partnership, trust or other person organized and existing under the laws of the United States, any state within the United States or the District of Columbia, and shall expressly assume, in the form of a supplemental indenture satisfactory to the trustee, the payment of all amounts due on the notes and the performance of all of the Issuer’s other covenants and other obligations under the indenture;
•immediately after giving effect to such transaction, no Event of Default, and no event that, after notice or lapse of time or both, would become an Event of Default, will have occurred and be continuing; and
•the Issuer has delivered an officer’s certificate and an opinion of counsel to the trustee, each stating that such transaction complies with the applicable provisions of the indenture and the execution of any supplemental indenture required in connection with such transaction is authorized and permitted under the indenture and all covenants and conditions precedent provided for in the indenture relating to the execution of such supplemental indenture have been performed, satisfied or otherwise complied with.
•The above provision shall not prohibit:
•the direct or indirect conveyance or transfer of all or any portion of the capital stock, assets or liabilities of any of the Issuer’s direct or indirect wholly owned subsidiaries to the Issuer or any of its direct or indirect wholly owned subsidiaries; or
•the consolidation or merger of any of the Issuer’s direct or indirect wholly owned subsidiaries with and into the Issuer.
If the conditions described above are satisfied with respect to the notes, the Issuer will not need to obtain the approval of the holders of the notes in order to consolidate or merge or to sell its assets. Also, these conditions will apply only if the Issuer wishes to consolidate with or merge into any other person, or convey, transfer, sell, or lease or otherwise dispose of its properties and assets substantially as an entirety to another person. The Issuer will not need to satisfy these conditions if the Issuer enters into other types of transactions, including any transaction in which the Issuer acquires the stock or assets of another entity, any transaction that involves a change of control but in which the Issuer does not consolidate or merge and any transaction in which the Issuer does not convey, transfer, sell, or lease or otherwise dispose of its properties and assets substantially as an entirety. It is possible that this type of transaction may result in a reduction in the Issuer’s credit rating, or may impair its operating results or its financial condition. Holders of the notes, however, will have no approval right with respect to any transaction of this type.
The Guarantors. As long as any notes are outstanding, each guarantor may not, and the Issuer may not permit any guarantor to, (i) consolidate with or merge into any other person, or convey, transfer, sell, or lease or otherwise dispose of such guarantor’s properties and assets substantially as an entirety, in one or more related transactions, to any person or (ii) permit any person to consolidate with or merge into such guarantor, unless:
•(a) such guarantor is the surviving entity or (b) if such guarantor is not the surviving entity, the person formed by the consolidation or into which such guarantor is merged or the person to which such guarantor’s properties and assets are so conveyed, transferred, sold, assigned or leased, shall be a corporation, partnership, limited liability company, limited liability partnership, trust or other person organized and existing under the laws of the United States, any state within the United States or the District of Columbia, and shall expressly assume, in the form of a supplemental indenture satisfactory to the trustee, the payment of all amounts due under such guarantor’s guarantee and the performance of all of such guarantor’s other covenants and other obligations under the indenture;
•immediately after giving effect to such transaction, no Event of Default, and no event that, after notice or lapse of time or both, would become an Event of Default, will have occurred and be continuing; and
•such guarantor has delivered an officer’s certificate and an opinion of counsel to the trustee, each stating that such transaction complies with the applicable provisions of the indenture and the execution of any supplemental indenture required in connection with such transaction is authorized and permitted under the indenture and all covenants and conditions precedent provided for in the indenture relating to the execution of such supplemental indenture have been performed, satisfied or otherwise complied with.
The immediately preceding paragraph shall not prohibit any guarantor from consolidating or merging with or into or transferring all or part of its properties and assets to the Issuer or another guarantor.
Limitation on Liens on Capital Stock of the Issuer’s Covered Subsidiaries
As long as any notes are outstanding, the Issuer will not, and will not permit any subsidiary to, directly or indirectly, create, assume, incur, guarantee or otherwise permit to exist any indebtedness for borrowed money that is secured, directly or indirectly, by any lien, other than a permitted lien, on any shares of capital stock of any Covered Subsidiary (whether such shares of capital stock are owned as of the date of the indenture or acquired after the date of the indenture), unless the notes are secured equally and ratably with such indebtedness for as long as such indebtedness is so secured; provided, that the foregoing will not prohibit or limit any lien required by law, any regulation or order of any governmental or insurance regulatory authority.
Limitation on Disposition of Capital Stock of the Issuer’s Covered Subsidiaries
As long as any notes are outstanding and except in a transaction otherwise governed by the indenture, the Issuer will not, and will not permit any subsidiary to, directly or indirectly, issue, sell, assign, transfer or otherwise dispose of any shares of, securities convertible into, or warrants, rights or options to subscribe for or purchase shares of, capital stock (other than preferred stock having no voting rights of any kind) of any Covered Subsidiary.
The above limitation will not apply to any issuance, sale, assignment, transfer or other disposition:
•that is for at least fair market value (as determined by the Issuer’s board of directors acting in good faith) subject to the provisions described under “—Consolidation, Merger, Sale or Conveyance” above;
•to the Issuer, any parent of the Issuer or any of its directly or indirectly wholly owned subsidiaries; or
•if required by law, any regulation or order of any court of competent jurisdiction or governmental or insurance regulatory authority.
Notwithstanding the foregoing, the Issuer may also merge or consolidate any of its subsidiaries into or with another of the Issuer’s direct or indirect subsidiaries.
Additional Guarantees
If, after the date of the indenture, any subsidiary guarantees (or becomes a co-borrower or co-issuer in respect of) the Issuer’s obligations under the Credit Agreement, within 15 days of such event, the Issuer shall cause such subsidiary to become a guarantor under the indenture by causing each such subsidiary to execute and deliver to the trustee a supplemental indenture in the form attached as an exhibit to the indenture pursuant to which such subsidiary shall fully and unconditionally guarantee all of the Issuer’s obligations under the notes and the indenture. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall also deliver to the trustee an officer’s certificate and an opinion of counsel stating that such guarantee complies with the applicable provisions of the indenture and the execution of such supplemental indenture is authorized and permitted under the indenture and all covenants and conditions precedent provided for in the indenture relating to the execution of such supplemental indenture have been performed, satisfied or otherwise complied with.
Reports
As long as any notes are outstanding, the Issuer will:
•furnish to the trustee, within 30 days after the Issuer is required to file the same with the SEC, the reports required by Section 314(a)(1) of the Trust Indenture Act of 1939 (the “Trust Indenture Act”), specifically, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) which the Issuer is required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer is not required to file information, documents or reports pursuant to either of such sections, then to furnish to the trustee and file with the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;
•furnish to the trustee and the SEC, in accordance with the rules and regulations prescribed from time to time by the SEC and as required by Section 314(a)(2) of the Trust Indenture Act, such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants provided for in the indenture, as may be required from time to time by such rules and regulations; and
•furnish to holders of the notes, within 30 days after the furnishing thereof with the trustee, as required by Section 314(a)(3) of the Trust Indenture Act and in the manner and to the extent provided in Section 313(c) thereof, such summaries of any information, documents and reports required to be filed by the Issuer pursuant to the foregoing two paragraphs, as may be required by the rules and regulations prescribed from time to time by the SEC.
Delivery of such reports, information and documents to the trustee is for informational purposes only and the trustee’s receipt of such will not constitute constructive notice of any information contained therein, including the Issuer’s compliance with any of its covenants under the indenture (as to which the trustee is entitled to rely
exclusively on officer’s certificates). The Trustee shall have no duty to review or make independent investigation with respect to any of the foregoing received by the Trustee, and shall hold the same solely as repository.
Events of Default
An “Event of Default” with respect to the notes is defined as:
•default in the payment of any interest on any of the notes when due and payable, and continuance of such default for a period of 30 days;
•default in the payment of any principal of, and premium (if any) on, any of the notes when due and payable either at maturity, upon any redemption, by declaration of acceleration or otherwise;
•failure by the Issuer or any guarantor in the performance, or breach, of any other covenant or agreement contained in the notes or in the indenture and relating to the notes and continuance of that failure for a period of 90 days after notice by the trustee or by the holders of at least 25% in principal amount of the outstanding notes;
•a default under the Issuer’s or any Covered Guarantor’s outstanding indebtedness (other than the notes or the guarantees) in the payment by the Issuer or such Covered Guarantor, when due, of an aggregate principal amount of such indebtedness exceeding $75,000,000, or default under any such indebtedness (other than the notes or the guarantees) in an aggregate principal amount exceeding $75,000,000 becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, in each case without such acceleration having been rescinded or annulled, or without such indebtedness having been paid in full, or without there having been deposited into trust a sum of money sufficient to pay in full such indebtedness, within ten days after notice by the trustee or by the holders of at least 25% in principal amount of the outstanding notes;
•except as permitted by the indenture, any guarantee shall be held by a court of competent jurisdiction in any non-appealable judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any Person acting on behalf of any such guarantor, shall deny or disaffirm in writing its obligations under its guarantee; or
•the Issuer or any Covered Guarantor files for bankruptcy or other events of bankruptcy or insolvency proceedings relating to the Issuer or any Covered Guarantor occur according to the terms of the indenture.
The trustee will notify the holders of notes of any continuing default of which the trustee has notice within the later of 90 days after the occurrence of the default or 60 days after such default is actually known to the trustee. Notwithstanding the foregoing, except in the case of default in the payment of the principal of, or premium (if any) or interest on, any of the notes, the trustee may withhold notice if the trustee in good faith determines that the withholding of notice is in the interests of the holders of the notes.
If an Event of Default with respect to the notes has occurred and is continuing (other than with respect to certain events of bankruptcy, insolvency or reorganization described in the fifth bullet point above), either the trustee or the holders of not less than 25% in aggregate principal amount of the notes then outstanding may declare the principal amount of all notes to be due and payable immediately. An Event of Default relating to a bankruptcy, insolvency or reorganization described in the fifth bullet point above will cause all of the notes to become immediately due and payable without any declaration or other act by the trustee or the holders. At any time after a declaration of acceleration in respect of the notes has been made, but before a judgment or decree for payment of money has been obtained by the trustee, and subject to applicable law and certain other provisions of the indenture, the holders of a majority in aggregate principal amount of the notes may, under certain circumstances, rescind and annul such acceleration.
Subject to the provisions of the indenture relating to the duties of the trustee, in case an Event of Default has occurred and is continuing, the trustee will not be under any obligation to exercise any of the trusts or powers vested in it by the indenture at the request or direction of any of the holders, unless such holders have offered to the trustee
security or indemnity reasonably satisfactory to it against any loss, liability or expense. The holders of a majority in aggregate principal amount of the notes affected then outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture or exercising any trust or power conferred on the trustee with respect to the notes; provided, that the trustee may refuse to follow any direction which is in conflict with any law or the indenture or that the trustee determines is unduly prejudicial to the rights of any other holder of a note (it being understood that the trustee does not have an affirmative duty to ascertain whether or not any such directions are unduly prejudicial to such holders) or that would involve the trustee in personal liability.
No holder of notes will have any right by virtue or by availing of any provision of the indenture to institute any proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to the indenture or for any remedy thereunder, unless, subject to the terms of the indenture, the holder has previously given the trustee written notice of default and the continuance thereof and unless the holders of at least 25% in aggregate principal amount of the outstanding notes have made written request to the trustee to institute such proceeding in its own name, and have offered to the trustee such indemnity as it may require, and the trustee shall have failed to institute such proceeding within 60 days after its receipt of such notice, request and offer of indemnity, and the trustee shall not have received from the holders of a majority in aggregate principal amount of the outstanding notes a direction inconsistent with such request. However, the right of a holder of any note to receive payment of the principal of, and premium (if any) and interest on, such note on or after the due dates expressed in such note, or to institute suit for the enforcement of any such payment on or after such dates, shall not be impaired or affected without the consent of such holder.
Under the indenture, the Issuer will be required to provide an officer’s certificate to the trustee promptly upon the Issuer becoming aware of any default or Event of Default that has occurred and is continuing, and describe such default or Event of Default, the status thereof and what action the Issuer is taking or proposes to take with respect thereto; provided, that the Issuer shall provide such certification at least annually whether or not they know of any default or Event of Default.
Defeasance
Legal Defeasance. If there is a change in U.S. federal tax law or U.S. Internal Revenue Service (“IRS”) ruling of the nature described in the sixth bullet below with respect to the notes, the Issuer can legally release itself and the guarantors from all payment and other obligations on the notes and the guarantees. This is called legal defeasance. To do so, each of the following must occur:
•The Issuer must deposit in trust for the benefit of all holders of the notes an amount of money, U.S. government or U.S. government agency securities (or a combination thereof) that will, in the written opinion of a nationally recognized accounting firm delivered to the trustee, generate enough cash to pay and discharge the principal of, and premium (if any) and interest on, the notes;
•The legal defeasance does not result in a breach or violation of, or constitute a default under, the indenture, the Credit Agreement or any other material agreement or instrument to which the Issuer or any Covered Subsidiary or guarantor is a party or is bound;
•No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to the notes to be legally defeased will have occurred and be continuing on the date of the trust deposit described in the first bullet point above and at any time during the period ending on the 91st day after such date;
•The Issuer must deliver to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent to legal defeasance have been complied with;
•The Issuer must deliver to the trustee an officer’s certificate as to its solvency and the absence of intent of preferring holders of the notes over other creditors; and
•The Issuer must deliver to the trustee an opinion of counsel to the effect that the holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance
and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred, and such opinion of counsel must refer to and be based upon a letter ruling of the IRS received by the Issuer, a revenue ruling published by the IRS or a change in applicable U.S. federal income tax law occurring after the date of the indenture.
If the Issuer ever did accomplish legal defeasance with respect to the notes, an investor in the notes would have to rely solely on the trust deposit for payments on its notes and such investor could not look to the Issuer or the guarantors for payment in the event of any shortfall.
Covenant Defeasance. Under current U.S. federal tax law, the Issuer can make the same type of trust deposit described above under “—Legal Defeasance” with respect to the notes and have the obligations of the Issuer and the guarantors released from certain restrictive covenants relating to the notes. This is called covenant defeasance. In that event, an investor in the notes would lose the protection of those restrictive covenants. In order to achieve covenant defeasance, each of the following must occur:
•The Issuer must deposit in trust for the benefit of the holders of the notes an amount of money, U.S. government or U.S. government agency securities (or a combination thereof) that will, in the written opinion of a nationally recognized accounting firm delivered to the trustee, generate enough cash to pay and discharge the principal of, and premium (if any) and interest on, the notes;
•The covenant defeasance does not result in a breach or violation of, or constitute a default under, the indenture, the Credit Agreement or any other material agreement or instrument to which the Issuer or any Covered Subsidiary or guarantor is a party or is bound;
•No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to the notes to be defeased will have occurred and be continuing on the date of the trust deposit described in the first bullet point above and at any time during the period ending on the 91st day after such date;
•The Issuer must deliver to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent to covenant defeasance have been complied with; and
•The Issuer must deliver to the trustee an opinion of counsel to the effect that the holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
If the Issuer accomplishes covenant defeasance with respect to the notes, the following provisions of the indenture and the notes would no longer apply: the covenants described above under “—Certain Covenants of the Issuer—Limitation on Liens on Capital Stock of the Issuer’s Covered Subsidiaries” and “—Certain Covenants of the Issuer—Limitation on Disposition of Capital Stock of the Issuer’s Covered Subsidiaries” and any Events of Default relating to the breach of these covenants.
If the Issuer accomplishes covenant defeasance with respect to the notes, an investor in the notes can still look to the Issuer for repayment of its notes in the event of any shortfall in the trust deposit. Investors in the notes should note, however, that if one of the remaining Events of Default occurred, such as the cross-default events described in the fourth bullet point above under “—Events of Default” or the Issuer’s bankruptcy or insolvency described in the fifth bullet point above under “—Events of Default,” and an investor’s notes became immediately due and payable, there may be a shortfall. Depending on the event causing the default, such investor may not be able to obtain payment to cover the shortfall.
The Issuer’s obligations under the indenture and the notes and the guarantors’ obligations under the guarantees, other than the Issuer’s obligations and the guarantors’ obligations under the covenants defeased, will remain in full force and effect.
Modification and Waiver
Certain modifications and amendments of the indenture (which, generally, either benefit or do not materially and adversely affect the holders of outstanding notes) may be made by the Issuer, the guarantors and the trustee without the consent of holders of the notes. Other modifications and amendments of the indenture require the consent of the holders of not less than a majority in aggregate principal amount of the outstanding notes of all series affected by such modifications and amendments. However, no modification or amendment may, without the consent of the holder of each affected outstanding note,
•change the final maturity of such note;
•reduce the principal amount of such note or any premium thereon;
•reduce the rate or extend the time of payment of interest on such note;
•reduce any amount payable upon redemption of such note;
•change the currency in which payments are made or the place where payments on such note are payable;
•impair or affect the right of any holder to institute suit for payment of such note;
•release any guarantor from any of its obligations under its guarantee or the indenture, except as permitted by the indenture; or
•reduce the percentage of notes, the consent of the holders of which is required for any such modification or amendment to the indenture.
The holders of not less than a majority in principal amount of the outstanding notes may, on behalf of the holders of all the notes, waive any past default under the indenture, except a default in the payment of the principal of, or premium (if any) or interest on, the notes.
Governing Law; Jury Trial Waiver
The indenture provides that it, the guarantees and the notes will be governed by, and construed in accordance with, the laws of the State of New York. The indenture provides that any legal suit, action or proceeding arising out of or based upon the indenture or the transactions contemplated thereby may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case located in the City of New York, and each party to the indenture will submit to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The indenture provides that the Issuer, the trustee and each holder of a note by its acceptance thereof, irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to the indenture, the notes, or any transaction contemplated thereby.
Concerning the Trustee
Citibank, N.A. is the trustee under the indenture and has been appointed by the Issuer as the paying agent and registrar with regard to the notes. The trustee will have, and will be subject to, all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act. The Issuer does, and from time to time may continue to, conduct banking transactions, including lending transactions, or maintaining deposit accounts with affiliates of Citibank, N.A. in the ordinary course of business. If the trustee becomes a creditor of the Issuer, the indenture limits the right of the trustee to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign.
DESCRIPTION OF OTHER INDEBTEDNESS
The following is a summary of the terms of our principal indebtedness. It does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the underlying documents.
2028 Senior Notes
On January 13, 2023, we issued 7.40% senior notes in the principal amount of $500 million due January 13, 2028 (the “Restricted 2028 Senior Notes”) pursuant to the indenture. The Restricted 2028 Senior Notes were offered and sold pursuant to Rule 144A, and outside of the United States pursuant to Regulation S, under the Securities Act and are fully and unconditionally guaranteed on a senior, unsecured, unsubordinated basis, jointly and severally, by each of our existing and future direct and indirect subsidiaries that are guarantors of our obligations under the Credit Agreement. Interest on the Restricted 2028 Senior Notes is payable semi-annually in arrears on January 13 and July 13 of each year.
In connection with the issuance of the Restricted 2028 Senior Notes, we and the guarantors entered into a registration rights agreement with the representatives of the initial purchasers, dated as of January 13, 2023 (the “registration rights agreement”), to allow holders of the unregistered Restricted 2028 Senior Notes to exchange the unregistered Restricted 2028 Senior Notes for registered notes that have substantially identical terms. On September 20, 2023, pursuant to the registration rights agreement, we completed an exchange offer whereby $499,641,000 aggregate principal amount of the Restricted 2028 Senior Notes were exchanged for substantially identical notes (together with the remaining Restricted 2028 Senior Notes, the “2028 Senior Notes”) that had been registered with the SEC under the Securities Act.
Prior to December 13, 2027 (one month prior to the maturity date of the 2028 Senior Notes), we may redeem the 2028 Senior Notes in whole or in part at any time at our option at a redemption price equal to 100% of the principal amount of the 2028 Senior Notes to be redeemed, plus a “make-whole” premium thereon at the time of redemption, plus accrued and unpaid interest thereon to, but excluding, the redemption date. Commencing on December 13, 2027 (one month prior to the maturity date of the 2028 Senior Notes), we may redeem the 2028 Senior Notes in whole or in part at any time at our option at a redemption price equal to 100% of the principal amount of the 2028 Senior Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date.
Revolving Credit Agreement
On November 22, 2022, we entered into a Credit Agreement (the “Credit Agreement”) with the guarantors from time to time party thereto, the lenders from time to time party thereto (the “Lenders”) and Bank of America, N.A. as administrative agent, swing line lender and an issuing bank, pursuant to which the Lenders made available to us an unsecured revolving credit facility in an aggregate principal amount of up to $550 million (the “Revolving Facility”) to be used for working capital and general corporate purposes, including, but not limited to, the issuance of letters of credit, capital contributions to insurance subsidiaries and the financing of permitted acquisitions. On January 6, 2023, we made a net partial paydown under the Revolving Facility of $35 million and on February 21, 2023, we entered into an amendment with the Lenders to increase the available aggregate principal amount of the Credit Agreement by $115 million to $665 million.
The Revolving Facility accrues interest at an initial rate of Term SOFR plus 1.65% per annum (subject to a pricing grid based upon our debt ratings). The Revolving Facility requires the payment of a facility fee at an initial rate of 0.35% per annum with respect to the commitments thereunder (subject to a pricing grid based upon our debt ratings) payable quarterly in arrears.
The Revolving Facility includes a borrowing capacity available for letters of credit of up to $50 million. Any issuance of letters of credit under the Revolving Facility will be at the issuing bank’s sole discretion and will reduce the amount available under the Revolving Facility.
Our obligations under the Credit Agreement are unconditionally guaranteed by each of our subsidiaries that are obligors in respect of the FGLH 2025 Senior Notes, so long as such entities remain obligors in respect of the FGLH 2025 Senior Notes or any refinancing indebtedness in respect thereof.
The Revolving Facility matures on the earlier of (i) November 22, 2025 and (ii) 91 days prior to the maturity date of the FGLH 2025 Senior Notes if FGLH 2025 Senior Notes with an outstanding principal amount in excess of $150 million are outstanding at such time and, at such time, neither FGLH nor the Issuer have deposited funds into an escrow account sufficient to reduce the outstanding principal amount of the FGLH 2025 Senior Notes to $150 million or less (plus accrued and unpaid interest thereon).
The Revolving Facility requires us, commencing with the fiscal quarter ending December 31, 2022, to (i) maintain, for any fiscal quarter, a minimum sum of all amounts which, in accordance with GAAP, would be included in our total equity (excluding the net worth attributable to any non-controlling interest and any AOCI required to be reported in our then most recent consolidated balance sheet) (“Net Worth”) of (a) 70% of Net Worth as of September 30, 2022 (the “Net Worth Test Date”) plus (b) 50% of any positive quarterly Net Income after the Net Worth Test Date plus (c) 50% of cumulative issuances of capital stock by us after the Net Worth Test Date, (ii) maintain a maximum Total Debt to Total Capitalization Ratio (as defined in the Credit Agreement) of 35% for each fiscal quarter and (iii) require FGL Insurance to maintain a minimum RBC Ratio (as defined in the Credit Agreement) of 300%, which is to be tested at the end of any fiscal quarter if, on such date, we do not have a debt rating from S&P, Moody’s and Fitch of greater than or equal to BBB-/Baa3/BBB-.
The Revolving Facility also contains a number of customary negative covenants. Such covenants, among other things, limit or restrict our and our subsidiaries’ ability to, among other things:
•incur additional indebtedness and make guarantees;
•incur liens on assets;
•engage in mergers or consolidations or fundamental changes;
•sell or dispose of assets;
•pay dividends and distributions or repurchase capital stock;
•make investments, loans and advances, including acquisitions;
•engage in certain transactions with affiliates;
•enter into certain agreements that would restrict the ability of subsidiaries to make payments to the Issuer;
•change the nature of the business, accounting policies or reporting practices affecting the calculation of the financial covenants; and
•cause FGL Insurance to cease to be a direct or indirect subsidiary of the Issuer.
The aforementioned restrictions are subject to certain exceptions and thresholds including (i) the ability to incur additional indebtedness and liens, make investments, dividends and distributions, asset sales, enter into transactions with affiliates and certain restrictive agreements subject to compliance with certain financial metrics, thresholds and certain other conditions, as applicable, and (ii) a number of other traditional exceptions that grant us continued flexibility to operate and develop our businesses. The Revolving Facility also contains certain customary representations and warranties, affirmative covenants and events of default.
As of September 30, 2023, $515 million of borrowings were outstanding under the Revolving Facility.
FGLH 2025 Senior Notes
On April 20, 2018, FGLH, our indirect wholly owned subsidiary, issued 5.50% senior notes in the principal amount of $550 million due May 1, 2025 (the “FGLH 2025 Senior Notes”) pursuant to an indenture among FGLH,
the guarantors from time to time party thereto and Wells Fargo Bank, National Association, as trustee, as amended from time to time. The FGLH 2025 Senior Notes were issued pursuant to Rule 144A under the Securities Act, and are fully and unconditionally guaranteed by CF Bermuda, FGLBS, FGL US Holdings and FNF. Interest on the FGLH 2025 Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year.
Prior to February 1, 2025 (three months prior to the maturity date of the FGLH 2025 Senior Notes), FGLH may redeem the FGLH 2025 Senior Notes in whole or in part at any time at its option at a redemption price equal to 100% of the principal amount of the FGLH 2025 Senior Notes to be redeemed, plus a “make-whole” premium thereon at the time of redemption, plus accrued and unpaid interest thereon, if any, to, but not including, the redemption date. Commencing on February 1, 2025 (three months prior to the maturity date of the FGLH 2025 Senior Notes), FGLH may redeem the FGLH 2025 Senior Notes in whole or in part at any time at its option at a redemption price equal to 100% of the principal amount of the FGLH 2025 Senior Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to, but not including, the redemption date.
FNF Credit Facility
On December 29, 2020, we entered into a mirror revolving note with FNF (the “FNF Credit Facility”). Under the FNF Credit Facility, FNF has agreed to provide us with revolving loans, from time to time upon our request, in an aggregate principal amount not to exceed $200 million (the “Commitment”).
Interest on the revolving loans is calculated based on the rate or rates of interest charged then on borrowings under the Fifth Amended and Restated Credit Agreement, dated as of October 29, 2020, among FNF, the lenders from time to time a party thereto and Bank of America, N.A. as administrative agent (the “FNF Credit Agreement”), plus 100 basis points.
The maturity date of each revolving loan is the earlier of October 29, 2025 and the date the FNF Credit Agreement is terminated. We have the right to prepay, at any time and from time to time, all or any portion of the outstanding principal amount of the revolving loans, without premium or penalty other than customary breakage costs. In addition, we have the right, at any time and from time to time, to terminate or reduce the Commitment upon prior written notice to FNF.
Upon an event of default under the FNF Credit Facility, FNF, at its option, has the right to declare the entirety of outstanding revolving loans immediately due and payable without notice or demand.
As of the date of this prospectus, there were no borrowings outstanding under the FNF Credit Facility.
LIMITATIONS ON VALIDITY AND ENFORCEABILITY OF CF BERMUDA GUARANTEE
Set out below is a summary of certain limitations on the enforceability of the guarantee of CF Bermuda. It is a summary only. The application of these laws in multiple jurisdictions could trigger disputes over which jurisdiction’s law should apply, and could adversely affect your ability to enforce your rights and to collect payment in full under the notes and the guarantees.
CF Bermuda is a Bermuda exempted company and is subject to Bermuda laws. Bermuda is a self-governing overseas territory of the United Kingdom. Bermuda’s legal system is based upon the English legal system. Bermuda has its own legislature, which enacts legislation for Bermuda. In addition, certain U.K. legislation is extended to Bermuda by the U.K. legislature and is effective in Bermuda. Where issues of common law in Bermuda have not been expressly considered by the Bermuda courts, the Bermuda courts often find assistance in the consideration of such issues in reasoned judgments of the English courts, as well as the courts of other common law jurisdictions, where appropriate. Their persuasiveness depends on the strength of the judicial reasoning and the standing of the judge who issued the decision. The Judicial Committee of the Privy Council sitting in London is the highest appellate court for Bermuda and decisions of that Committee are formally binding upon Bermuda courts.
Bermuda’s insolvency regime is generally premised upon the concept of pari passu distribution of assets amongst the creditors of the insolvent company. An insolvent Bermuda company may be the subject in Bermuda of liquidation proceedings. In the context of insolvency, the other proceedings that may be used in Bermuda are a scheme of arrangement or receivership, but these are not exclusive to insolvency. There are two types of insolvent liquidations in Bermuda: voluntary and compulsory. The former is usually referred to as a “creditors voluntary liquidation,” and is commenced by the shareholders of the company (it is an out of court procedure); while the latter is commenced by way of a petition presented to the Supreme Court of Bermuda (the “Bermuda Court”) by a creditor or shareholder or the company itself, upon which the court is asked to make a winding-up order. There are a number of circumstances provided for in Section 161 of the Companies Act 1981, as amended (the “Companies Act”) in which a Bermuda company may be wound up by the court, the most common of which is when the company is unable to pay its debts.
In the case of the company’s inability to pay its debts, the petition can be presented by either the company or a creditor or a shareholder of the company (provided the shareholder has a tangible interest in the liquidation). For this purpose, “creditor” includes a contingent or prospective creditor. Pursuant to the Companies Act, a company will be deemed to be unable to pay its debts if:
•a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred dollars then due, has served on the company, by leaving it at the registered office of the company, a demand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor;
•the execution or other process issued on a judgment, decree or order of any court in favor of a creditor of the company is returned unsatisfied in whole or in part; or
•it is proved to the satisfaction of the Bermuda Court that the company is unable to pay its debts. In determining whether a company is unable to pay its debts, the court will take into account the contingent and prospective liabilities of the company.
Upon the appointment of a liquidator (initially a provisional liquidator), the powers of the directors of a Bermuda company will, subject to any order of the Bermuda Court to the contrary, cease. The liquidator is required to collect in the assets and after payment of secured creditors (out of assets subject to their security) and the expenses of the liquidation, distribute them pari passu amongst unsecured creditors (with certain unsecured preferential debts, such as employee claims and government taxes, ranking in priority of payment ahead of ordinary unsecured creditors). Secured creditors are entitled to enforce their security outside of the liquidation proceeding.
There are no bankruptcy treaties in force under the laws of Bermuda.
Under Bermuda law, certain transactions may be set aside or otherwise be varied or amended by order of a Bermuda court when a Bermuda company goes into liquidation. This occurs where an impugned transaction is a fraudulent preference or a transaction that constitutes a fraud on creditors or, under certain circumstances, a floating charge.
Section 237 of the Companies Act provides that certain transactions in favor, or for the benefit, of any creditors, within the six months prior to the commencement of a company’s liquidation, may be set aside if the transactions were made with the dominant intention of preferring those creditors over others and the company was insolvent at the time of the transaction or rendered insolvent by it.
Under Section 166 of the Companies Act, any disposition of the property of a Bermuda company made after the commencement of a court-ordered winding-up is, unless the court orders otherwise, void. Under section 246 of the Companies Act, any person that is found in the course of a liquidation of a Bermuda company, to have been knowingly party to the carrying on of the business of the company with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, may be held by the Bermuda Court to be personally liable for the debts or other liabilities of the company.
Any floating charge created by a Bermuda company within the 12 months immediately preceding the commencement of the company’s winding-up shall, except to the amount of any cash paid to the company at the time of or after the creation of, and in consideration for, the charge, be invalid unless it is proved that the company was solvent immediately after the creation of the charge.
In addition, under Part IVA of the Conveyancing Act 1983 of Bermuda, certain dispositions of a Bermuda company’s property are voidable if (i) the disposition was a disposition the dominant purpose of which is to put the property which is the subject of that disposition beyond the reach of a person or a class of persons who is making, or may at some time make, a claim against the company; and (ii) the disposition is at an undervalue. Where the person seeking to set aside the disposition was not, on the date of the disposition, a person to whom an obligation was owed by the transferor, the Bermuda Court will not set aside the disposition unless it is satisfied that that person was, on the date of disposition, reasonably foreseeable by the transferor as a person to whom an obligation might become owed by the transferor. The limitation period on such dispositions is six years from the transfer, or, if later, from the time when the obligation or cause of action in favor of the creditor arose or accrued. These provisions apply whether or not the company is insolvent or in liquidation.
In the winding up of an insolvent Bermuda company, set-off of mutual credits, mutual debts or other mutual dealings subsisting at the date of the liquidation is mandatory and no other set-off is permissible.
SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES
CF Bermuda is incorporated under the laws of Bermuda. A portion of the assets of CF Bermuda are located outside the United States. As a result, an investor may need to effect service of process upon CF Bermuda in Bermuda (at its registered office).
There is no treaty in force between the United States and Bermuda providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As a result, whether a U.S. judgment would be enforceable in Bermuda against CF Bermuda (or its directors and officers, if applicable) depends on an application of Bermuda’s common law rules relating to the enforcement of foreign judgments. By way of summary only, Bermuda’s common law provides that (outside the bankruptcy context) a U.S. judgment (being a final and conclusive judgment for a debt or a definite sum of money not being in respect of taxes or a fine or other penalty) will be enforceable in Bermuda by an action for the amount of the judgment, and the only grounds for resisting the enforcement of such a judgment would be (1) the U.S. court that entered the judgment is not recognized by the Bermuda court as having had jurisdiction over CF Bermuda (or its directors and officers, if applicable), as determined by reference to Bermuda’s conflict of law rules. A judgment from a U.S. court, even one that is final and conclusive and for a debt or definite sum of money, will not be enforceable in Bermuda unless the judgment debtor was either present in the relevant U.S. jurisdiction when the U.S. proceedings were instituted or had submitted to the jurisdiction of the U.S. court, and the issue of presence, submission and jurisdiction is assessed as a matter of Bermuda’s (not the United States’) rules of private international law; (2) the judgment was obtained by fraud; (3) the enforcement of the judgment would be contrary to Bermuda public policy; or (4) the proceedings in which the judgment was obtained were contrary to natural justice.
In addition to and irrespective of jurisdictional issues, the Bermuda courts will not enforce a U.S. judgment that is based on a U.S. federal securities law that is either penal or contrary to the public policy of Bermuda. A foreign judgment based on a foreign public, revenue or penal law, the purpose of which is the enforcement of a sanction, power or right at the instance of the foreign state in its sovereign character or by virtue of sovereign authority, may not be recognized and enforced by a Bermuda court. Certain remedies available under the laws of U.S. jurisdictions, including awards of multiple damages and certain remedies under U.S. federal securities laws, are not available under Bermuda law or enforceable in a Bermuda court, if they are penal in nature or if enforcement would be contrary to Bermuda public policy. Further, it may not be possible to pursue direct claims in Bermuda against CF Bermuda or its directors and officers for alleged violations of U.S. federal securities laws because U.S. federal securities laws are unlikely to have extraterritorial effect and do not have the force of law in Bermuda. A Bermuda court may, however, impose civil liability on CF Bermuda or its directors and officers if the facts alleged and proved in the Bermuda proceedings constitute or give rise to a cause of action under the applicable governing law, not being a foreign public, penal or revenue law.
No stamp duty or similar or other tax or duty is payable in Bermuda on the enforcement of a foreign judgment. Court fees will be payable in connection with proceedings for enforcement.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of U.S. federal income tax considerations generally applicable to the ownership and disposition of the notes by a Non-U.S. Holder (as defined below) that purchases the notes pursuant to and at the price indicated on the cover of this prospectus and holds the notes as “capital assets” (generally, property held for investment purposes) for U.S. federal income tax purposes. This discussion is based upon the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury Regulations promulgated thereunder, judicial decisions and current administrative rulings and practice, all as in effect and available as of the date of this prospectus and all of which are subject to differing interpretations or change, possibly with retroactive effect. No ruling from the IRS has been or is expected to be sought on any of the issues discussed herein, and there can be no assurance that the IRS or a court will concur with the conclusions reached below.
This discussion does not discuss all aspects of U.S. federal income taxation which may be important to particular investors in light of their individual circumstances, such as investors subject to special tax rules (e.g., banks and financial institutions, insurance companies, real estate investment trusts, broker-dealers, partnerships and their partners, tax-exempt organizations (including private foundations), qualified retirement plans, “controlled foreign corporations,” “passive foreign investment companies,” holders subject to the alternative minimum tax and certain former citizens and former long-term residents of the United States), or to persons that will hold the notes as part of a broader transaction, all of whom may be subject to tax rules that differ significantly from those summarized below. Furthermore, this discussion does not address any other U.S. federal tax consequences (e.g., estate or gift tax or the Medicare tax on net investment income) or any state, local or non-U.S. tax laws. Prospective investors are urged to consult their own tax advisors regarding the U.S. federal, state, local and non-U.S. income and other tax consequences applicable to them in their particular circumstances.
For the purposes of this summary, a “Non-U.S. Holder” is a beneficial owner of a note that, for U.S. federal income tax purposes, is not (i) a citizen or individual resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the law of, the United States or any state or political subdivision thereof, (iii) an estate, the income of which is subject to U.S. federal income tax regardless of source, (iv) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all of the substantial decisions of the trust or (B) that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a domestic trust, or (v) a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes.
If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds notes, the U.S. federal income tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partners and partnerships are urged to consult their own tax advisors as to the particular U.S. federal income tax consequences applicable to them.
Payments of Interest
A Non-U.S. Holder will generally not be subject to U.S. federal income or withholding tax on payments of interest on the notes provided that (1) such interest is not effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder (or, if required under an applicable treaty, such interest is not attributable to a permanent establishment or fixed base maintained within the United States by the Non-U.S. Holder) and (2) the Non-U.S. Holder (a) does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Issuer entitled to vote, (b) is not a controlled foreign corporation related to the Issuer (within the meaning of the Code), and (c) certifies, under penalties of perjury, to the applicable withholding agent on IRS Forms W-8BEN or W-8BEN-E (or appropriate substitute form) that it is not a U.S. person and that no withholding is required pursuant to the Foreign Account Tax Compliance Act (“FATCA”) (discussed below), and provides its name, address and certain other required information or certain other certification requirements are satisfied.
If interest on the notes is not effectively connected with the conduct of a trade or business in the United States by a Non-U.S. Holder but such Non-U.S. Holder cannot satisfy the other requirements outlined in the preceding
paragraph, interest on the notes will generally be subject to U.S. federal withholding tax (currently imposed at a 30% rate), unless the withholding tax rate is reduced or eliminated by an applicable treaty, and such Non-U.S. Holder is a qualified resident of the treaty country and complies with certain certification requirements.
If interest on the notes is effectively connected with the conduct of a trade or business within the United States by a Non-U.S. Holder and, if required under an applicable treaty, such interest is attributable to a permanent establishment or fixed base within the United States, then the Non-U.S. Holder will generally be subject to U.S. federal income tax on the receipt or accrual of such interest on a net income basis in the same manner as if such holder were a U.S. person and, in the case of a Non-U.S. Holder that is a foreign corporation, may also be subject to an additional branch profits tax (currently imposed at a rate of 30%, or a lower applicable treaty rate) on its effectively connected earnings and profits for the taxable year, subject to adjustments. Any such interest will not also be subject to U.S. federal withholding tax, however, if the Non-U.S. Holder timely provides the withholding agent a properly executed IRS Form W-8ECI in order to claim an exemption from U.S. federal withholding tax.
Sale, Exchange, Redemption or Other Disposition of the Notes
A Non-U.S. Holder will generally not be subject to U.S. federal income tax (or any withholding thereof) with respect to gain, if any, recognized upon the sale, exchange, redemption or other disposition of the notes (other than any amount representing accrued and unpaid interest on the note, which is subject to the rules discussed above under “—Payments of Interest”) unless (1) the gain is effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder and, if required under an applicable treaty, is attributable to a permanent establishment or fixed base of the Non-U.S. Holder within the United States, or (2) in the case of a Non-U.S. Holder that is an individual, such holder is present in the United States for 183 or more days in the taxable year in which the sale, exchange, redemption or other disposition of the notes occurs and certain other conditions are satisfied.
Gain that is effectively connected with the conduct of a trade or business in the United States will generally be subject to U.S. federal income tax on a net income basis (but not U.S. withholding tax), in the same manner as if the Non-U.S. Holder were a U.S. person, and, in the case of a Non-U.S. Holder that is a foreign corporation, may also be subject to an additional branch profits tax (currently imposed at a rate of 30%, or a lower applicable treaty rate) on its effectively connected earnings and profits, subject to adjustments. An individual Non-U.S. Holder who is subject to U.S. federal income tax because the Non-U.S. Holder was present in the United States for 183 days or more during the year of sale, exchange, redemption or other disposition of the notes will be subject to a flat 30% tax on the gain derived from such sale, exchange, redemption or other disposition, which may be offset by certain U.S.-source capital losses.
Foreign Account Tax Compliance Act
Under FATCA, withholding at a rate of 30% will generally be required in certain circumstances on interest payable on notes held by or through certain financial institutions (including investment funds), unless such institution (i) enters into, and complies with, an agreement with the IRS to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that are owned by certain U.S. persons or by certain non-U.S. entities that are wholly or partially owned by U.S. persons and to withhold on certain payments, or (ii) if required under an intergovernmental agreement between the United States and an applicable foreign country, reports such information to its local tax authority, which will exchange such information with the U.S. authorities. An intergovernmental agreement between the United States and an applicable foreign country, or other guidance, may modify these requirements. Accordingly, the entity through which the notes are held will affect the determination of whether such withholding is required. Similarly, interest payable on the notes held by an investor that is a non-financial non-U.S. entity that does not qualify under certain exemptions will generally be subject to withholding at a rate of 30%, unless such entity either (i) certifies that it does not have any “substantial United States owners” or (ii) provides certain information regarding the entity’s “substantial United States owners,” which will, in turn, be provided to the United States Department of the Treasury. We will not pay any additional amounts to investors in respect of any amounts withheld as a result of FATCA. Prospective investors are urged to consult their own tax advisors regarding the possible implications of these rules on an investment in the notes.
UNDERWRITING (CONFLICTS OF INTEREST)
General
Wells Fargo Securities, LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC are acting as representatives of the underwriters and joint book-running managers in connection with the offering. Subject to the terms and conditions stated in the underwriting agreement, dated the date of this prospectus (the “underwriting agreement”), among the Issuer, the guarantors and Wells Fargo Securities, LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC, as representatives of the several underwriters named below, each underwriter named below has, severally and not jointly, agreed to purchase, and the Issuer has agreed to sell to such underwriter, the principal amount of notes set forth opposite such underwriter’s name at the public offering price less the underwriting discount set forth on the cover page of this prospectus.
| | | | | |
| Underwriter | Principal Amount of the Notes |
Wells Fargo Securities, LLC | $ |
BofA Securities, Inc. | |
Morgan Stanley & Co. LLC | |
RBC Capital Markets, LLC | |
UBS Securities LLC | |
Total | $ | 250,000,000 | |
The underwriting agreement provides that the obligations of the underwriters to purchase the notes are subject to approval of legal matters by counsel and to other conditions.
The underwriters have agreed to take and pay for all of the notes being offered if any of them are taken. The underwriters propose to offer the notes directly to the public at the public offering price set forth on the cover page of this prospectus and may offer the notes to certain dealers at a price that represents a concession not in excess of $ per note with respect to retail sales and $ per note with respect to institutional sales. Any underwriter may allow, and any such dealer may reallow, a concession not in excess of $ per note on sales to certain other dealers. After the initial offering of the notes, the underwriters may from time to time change the offering price and other selling terms thereof. The offering of the notes by the underwriters is subject to the underwriters’ right to reject any order in whole or in part.
The underwriters have an option to buy up to an additional $37,500,000 aggregate principal amount of the notes from the Issuer to cover sales of notes by the underwriters which exceed the amount of notes specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this overallotment option. If any notes are purchased with this overallotment option, the underwriters will purchase notes in approximately the same proportion as shown in the table above. If any additional notes are purchased, the underwriters will offer the additional notes on the same terms as those on which all notes are being offered. The Issuer is responsible for the payment of any interest that the notes subject to this overallotment option accrue between the date of this offering and the underwriters’ exercise of the overallotment option.
The amount of the total underwriting discount (expressed as a percentage of the principal amount of the notes) to be paid by the Issuer to the underwriters in respect of this offering is %, as presented in the following table.
The information in the table assumes either no exercise or full exercise by the underwriters of their overallotment option.
| | | | | | | | | | | | | | | | | |
| Per Note | | Without Option | | With Option |
Public offering price | % | | $ | | $ |
Underwriting discount | % | | $ | | $ |
Proceeds to the Issuer before expenses | % | | $ | | | | $ |
The amount of the underwriting discount (expressed as a percentage of the principal amount of the notes) to be paid by the Issuer to the underwriters in respect of this offering is % with respect to $ of retail sales and % with respect to $ of institutional sales.
The Issuer’s out-of-pocket expenses of the offering, not including the underwriting discount, are estimated to be $1.0 million.
In connection with the offering, the underwriters may purchase and sell the notes in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of notes than they are required to purchase in the offering. Stabilizing transactions consist of certain bids or purchases made for the purpose of preventing or retarding a decline in the market price of the notes while the offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the underwriters or their respective affiliates have repurchased notes sold by or for the account of such underwriter in stabilizing or short covering transactions.
These activities by the underwriters may stabilize, maintain or otherwise affect the market price of the notes. As a result, the price of the notes may be higher than the price for the notes that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the underwriters at any time. These transactions may be effected in the over-the-counter market or otherwise.
None of the Issuer, the guarantors or any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the notes. In addition, none of the Issuer, the guarantors or any of the underwriters makes any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
The notes are a new issue of securities with no established trading market. The Issuer intends to apply to list the notes on the NYSE under the symbol “FGN,” and if the application is approved, the Issuer expects trading in the notes on the NYSE to begin within 30 days of the original issue date. The Issuer has been advised by certain of the underwriters that they presently intend to make a market in the notes after completion of the offering. However, they are under no obligation to do so. The underwriters may discontinue any market-making activities at any time without any notice. The Issuer cannot assure the liquidity of the trading market for the notes. If an active trading market for the notes does not develop or is reduced or discontinued, the market price and the liquidity of the notes may be adversely affected.
The Issuer expects that delivery of the notes will be made to investors on or about , 2023, which will be the business day following the date of this prospectus (such settlement being referred to as “T+ ”). Under Rule 15c6-1 under the Exchange Act, trades in the secondary market are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes prior to the second business day before delivery of the notes hereunder will be required, by virtue of the fact that the notes initially settle in T+ , to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the notes who wish to trade the notes prior to the second business day before their date of delivery hereunder should consult their advisors.
The Issuer cannot assure the liquidity of the trading market for the notes. If an active trading market for the notes does not develop or is reduced or discontinued, the market price and the liquidity of the notes may be adversely affected. Holders of the notes should proceed on the assumption that they may have to bear the economic risk of an investment in the notes until maturity. If the notes are traded, they may trade at a discount from their initial offering price, depending on prevailing interest rates, the market for similar securities, the Issuer’s operating performance and financial condition, general economic conditions and other factors. The underwriters have represented and agreed that they have not and will not offer, sell or deliver the notes, directly or indirectly, or distribute this prospectus or any other offering material relating to the notes, in any jurisdiction except under circumstances that will result, to the best of their knowledge, in compliance with applicable laws and regulations and that will not impose any obligations on the Issuer except as set forth in the underwriting agreement.
The Issuer has agreed in the underwriting agreement, that, for a period beginning from the date of this prospectus and continuing until the date that is 30 days from the date of this prospectus, it will not, without the prior written consent of the representatives of the underwriters, offer, sell, contract to sell or otherwise dispose of any debt securities that are substantially similar to the notes.
The Issuer has agreed in the underwriting agreement to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriters may be required to make because of any of those liabilities.
Certain Relationships
The underwriters and their respective affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and their respective affiliates may from time to time have provided, and may provide in the future, certain investment banking, commercial banking and other financial services to the Issuer and its subsidiaries in the ordinary course of their business for which they may have received and may in the future receive customary fees and commissions. In particular, the underwriters and/or their affiliates are lenders and/or agents under the Credit Agreement, including Bank of America, N.A., which acts as the administrative agent thereunder.
In addition, in the ordinary course of their business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer or its affiliates. If any of the underwriters or their respective affiliates have a lending relationship with the Issuer, certain of those underwriters or their affiliates routinely hedge, and certain other of those underwriters or their respective affiliates may hedge, their credit exposure to the Issuer consistent with their customary risk management policies. Typically, these underwriters and their respective affiliates would hedge such exposure by entering into transactions that consist of either the purchase of credit default swaps or the creation of short positions in the Issuer’s securities, including potentially the notes offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices of the notes offered hereby. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Conflicts of Interest
As described under “Use of Proceeds,” the Issuer intends to use the net proceeds from the sale of the notes in this offering to repay borrowings under the Credit Agreement and for general corporate purposes, including the support of organic growth opportunities. As of September 30, 2023, the Issuer had $515 million of borrowings outstanding under the Credit Agreement. Certain of the underwriters and their respective affiliates are lenders under the Credit Agreement, and accordingly will receive a portion of the net proceeds of this offering. To the extent that any underwriter, together with its affiliates, receives more than 5% of the net proceeds of this offering, not including the underwriting discount, such underwriter would be considered to have a “conflict of interest” with respect to this
offering pursuant to FINRA Rule 5121. Pursuant to FINRA Rule 5121, the appointment of a qualified independent underwriter is not necessary in connection with this offering. No affected underwriter will confirm sales to any account over which it exercises discretionary authority without the prior written consent of the account holder.
Selling Restrictions
The notes are offered for sale in those jurisdictions in the United States and elsewhere where it is lawful to make such offers. The notes will not be offered, sold or delivered directly or indirectly, nor will this prospectus or any other offering materials relating to the notes be distributed, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on the Issuer except as set forth in the underwriting agreement.
Notice to Prospective Investors in the European Economic Area
This prospectus is not a prospectus for the purposes of Regulation (EU) 2017/1129 (the “Prospectus Regulation”). This prospectus has been prepared on the basis that any offer of notes in any Member State of the European Economic Area (the “EEA”) will only be made to a legal entity which is a qualified investor under the Prospectus Regulation (“EEA Qualified Investors”). Accordingly, any person making or intending to make an offer in that Member State of notes which are the subject of the offering contemplated in this prospectus may only do so with respect to EEA Qualified Investors. Neither the Issuer nor the underwriters have authorized, nor do they authorize, the making of any offer of notes other than to EEA Qualified Investors.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes: (a) a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97, as amended (the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation; and (b) the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes. Consequently, no key information document required by Regulation (EU) No 1286/2014, as amended (the “PRIIPs Regulation”) for offering or selling the notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
Notice to Prospective Investors in the UK
This prospectus is not a prospectus for the purposes of Regulation (EU) 2017/1129 as it forms part of domestic law in the UK by virtue of the European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal Agreement) Act 2020 (the “EUWA”) (the “UK Prospectus Regulation”). This prospectus has been prepared on the basis that any offer of notes in the UK will only be made to a legal entity which is a qualified investor under the UK Prospectus Regulation (“UK Qualified Investors”). Accordingly, any person making or intending to make an offer in the UK of notes which are the subject of the offering contemplated in this prospectus may only do so with respect to UK Qualified Investors. Neither the Issuer nor the underwriters have authorized, nor do they authorize, the making of any offer of notes other than to UK Qualified Investors.
PROHIBITION OF SALES TO UK RETAIL INVESTORS – The notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the UK. For these purposes: (a) a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law in the UK by virtue of the EUWA; or (ii) a customer within the meaning of the provisions of the UK’s Financial Services and Markets Act 2000, as amended (the “FSMA”) and any rules or regulations made under the FSMA to implement the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law in the UK by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of the UK Prospectus Regulation; and (b) the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the
notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law in the UK by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
Other Regulatory Restrictions in the UK
The communication of this prospectus and any other document or materials relating to the issue of the notes offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the FSMA. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the UK. The communication of such documents and/or materials as a financial promotion is only being made to and is only directed at those persons in the UK who have professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together being referred to as “relevant persons”). In the UK, the notes offered hereby are only available to, and any investment or investment activity to which this prospectus relates will be engaged in only with, relevant persons. Any person in the UK that is not a relevant person should not act or rely on this prospectus or any of its contents.
Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the notes may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer.
All applicable provisions of the FSMA must be complied with in respect to anything done by any person in relation to the notes in, from or otherwise involving the UK.
Notice to Prospective Investors in Canada
The notes may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the notes must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation; provided, that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with the offering.
Notice to Prospective Investors in Hong Kong
The notes have not been offered or sold and will not be offered or sold in Hong Kong by means of any document other than: (i) in circumstances that do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (“Companies (Winding Up and Miscellaneous Provisions) Ordinance”); (ii) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“Securities and Futures Ordinance”)
and any rules made thereunder; or (iii) in other circumstances that do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the notes has been or may be issued or has been or may be in the possession of any person for the purpose of issue (in each case, whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to notes that are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.
The contents of this prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
Notice to Prospective Investors in Singapore
This prospectus has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or the invitation for subscription or purchase, of the notes may not be issued, circulated or distributed, nor may the notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than: (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”)) pursuant to Section 274 of the SFA; (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA; or (iii) otherwise pursuant to, and in accordance with, the conditions of any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where the notes are subscribed or purchased under Section 275 of the SFA by a relevant person that is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)), the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor (as defined in Section 4A of the SFA)) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, then securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or trust has acquired the notes pursuant to an offer made under Section 275 of the SFA, except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), or to any person pursuant to an offer that is made on terms that such securities of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further, for corporations, in accordance with the conditions specified in Section 275 of the SFA; (y) where no consideration is given for the transfer; or (z) where the transfer is by operation of law.
Singapore Securities and Futures Act Product Classification: Solely for the purposes of its obligations pursuant to Sections 309B(1)(a) and 309B(1)(c) of the SFA, the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A of the SFA), that the notes are “prescribed capital markets products” (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and “Excluded Investment Products” (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendation on Investment Products).
Notice to Prospective Investors in Japan
The notes have not been and will not be registered pursuant to Article 4, Paragraph 1 of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended) (the “FIEA”). Accordingly, none of the notes or any interest therein may be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any “resident” of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for reoffering or resale, directly or indirectly, in Japan or
to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of and otherwise in compliance with the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan in effect at the relevant time.
Notice to Prospective Investors in Switzerland
This prospectus is not intended to constitute an offer or solicitation to purchase or invest in the notes. The notes may not be publicly offered, directly or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act (the “FinSA”) and will not be admitted to any trading venue (exchange or multilateral trading facility) in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the notes constitutes a prospectus as such term is understood pursuant to the FinSA, and neither this prospectus nor any other offering or marketing material relating to the notes may be publicly distributed or otherwise made publicly available in Switzerland.
Notice to Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”) and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the notes may only be made to persons (such persons, the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the notes without disclosure to investors under Chapter 6D of the Corporations Act.
The notes applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document that complies with Chapter 6D of the Corporations Act.
This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
Notice to Prospective Investors in the Dubai International Financial Centre
This prospectus relates to an “Exempt Offer” in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (the “DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for this prospectus. The notes to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the notes offered should conduct their own due diligence on the notes. If you do not understand the contents of this prospectus, you should consult an authorized financial advisor.
LEGAL MATTERS
The validity of the notes and the guarantees will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, as United States counsel, and ASW Law Limited, as Bermuda counsel. Certain legal matters will be passed upon for the underwriters by Pillsbury Winthrop Shaw Pittman LLP.
EXPERTS
The consolidated financial statements of F&G Annuities & Life, Inc. and subsidiaries appearing in F&G Annuities & Life, Inc.’s Current Report on Form 8-K dated July 13, 2023 for the year ended December 31, 2022 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement on Form S-1 we have filed with the SEC under the Securities Act to register the securities offered by this prospectus. The registration statement, including the attached exhibits and schedules, contains additional relevant information about us and the securities described in this prospectus. The rules and regulations of the SEC allow us to omit certain information included in the registration statement from this prospectus.
We file annual, quarterly and current reports, and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information that we file electronically with the SEC at www.sec.gov, from which interested persons can electronically access our filings with the SEC, including the registration statement of which this prospectus is a part, including the exhibits and schedules thereto. The reports and other information we file with the SEC also are available through our website at www.fglife.com. The information on our website is not part of this prospectus, other than documents that we file with the SEC that are incorporated by reference in this prospectus.
You may also request a copy of any of our filings with the SEC orally or in writing, at no cost to the requester, directed to the following address:
Investor Relations
F&G Annuities & Life, Inc.
801 Grand Avenue, Suite 2600
Des Moines, IA 50309
Telephone: (515) 330-3307
Email: Investor.relations@fglife.com
No person is authorized by us to give any information or to make any representations other than those contained or incorporated by reference in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by us. Neither the delivery of this prospectus nor any distribution of securities made hereunder shall imply that there has been no change in the information set forth or incorporated by reference herein or in our affairs since the date hereof.
INCORPORATION BY REFERENCE
The SEC’s rules allow us to “incorporate by reference” into this prospectus the information we file with it. This means that we can disclose important information to you by referring you to those documents. Any information that we incorporate by reference is considered to be part of this prospectus. We incorporate by reference into this prospectus the following documents:
(a)our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 27, 2023, as amended and supplemented by our Form 10-K/A filed with the SEC on April 27, 2023 and as updated and supplemented by our Current Report on Form 8-K filed with the SEC on July 13, 2023 (only with respect to Item 8.01 information); (b)our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, filed with the SEC on May 9, 2023; (c)our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, filed with the SEC on August 9, 2023; (d)our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, filed with the SEC on November 8, 2023; and (e)our Current Reports on Form 8-K filed with the SEC on, January 13, 2023, February 21, 2023, March 10, 2023, April 3, 2023, April 24, 2023, May 3, 2023 (only with respect to Item 8.01 information), June 1, 2023, June 30, 2023, July 17, 2023 and August 8, 2023 (only with respect to Item 8.01 information). We are not incorporating by reference any information furnished under Items 2.02 or 7.01 (or corresponding information furnished under Item 9.01 or included as an exhibit) in any past or future Current Reports on Form 8-K that we may file with the SEC, unless otherwise specified in such Current Report.
Any statement made in a document incorporated by reference into this prospectus will be deemed to be modified or superseded to the extent that a statement contained in this prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You can obtain any of the filings incorporated by reference into this prospectus through us or from the SEC through the SEC’s website at http://www.sec.gov. We will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered, upon written or oral request of such person, a copy of any or all of the reports and documents referred to above which have been or may be incorporated by reference into this prospectus. You should direct requests for those documents to Investor Relations, F&G Annuities & Life, Inc., 801 Grand Avenue, Suite 2600, Des Moines, Iowa 50309, Telephone: (515) 330-3307, Email: investor.relations@fglife.com.
Our reports and documents incorporated by reference herein may also be found in the “Investors” section of our website at https://www.fglife.com. The information on our website is not part of this prospectus.
$250,000,000
F&G Annuities & Life, Inc.
% Senior Notes due 2053
PRELIMINARY PROSPECTUS
Joint Book-Running Managers
| | | | | | | | | | | | | | |
| Wells Fargo Securities | BofA Securities | Morgan Stanley | RBC Capital Markets | UBS Investment Bank |
, 2023
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses we will pay, other than the underwriting discount, in connection with this offering. All amounts are estimates except the SEC registration fee.
| | | | | |
| Amount to be Paid |
SEC registration fee | $ | 42,435 | |
Stock exchange listing fee | 10,000 | |
Accounting fees and expenses | 150,000 | |
Legal fees and expenses | 475,000 | |
Trustee and registrar fees | 9,000 | |
Miscellaneous fees and expenses | 350,000 | |
Total | $ | 1,036,435 | |
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (“Section 145”) provides that a Delaware corporation may indemnify any person who was, is or is threatened to be made, party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, were or are a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, officer, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests; provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred.
Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of their status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.
Our bylaws provide that we shall, to the fullest extent legally permissible under the General Corporation Law of the State of Delaware, indemnify and hold harmless our officers and directors for certain liabilities reasonably incurred in connection with such person’s capacity as an officer or director.
Item 15. Recent Sales of Unregistered Securities
On January 13, 2023, we issued $500,000,000 aggregate principal amount of 7.40% Senior Notes due 2028. We sold the 7.40% Senior Notes due 2028 to the initial purchasers thereof at an offering price equal to 99.959% of the principal amount thereof, less an initial purchaser discount of 0.600% of the principal amount thereof. Our 7.40% Senior Notes due 2028 were resold by the initial purchasers only to persons reasonably believed to be “qualified institutional buyers” in compliance with Rule 144A under the Securities Act and to “non-U.S. persons” outside the United States in reliance on Regulation S under the Securities Act. BofA Securities, Inc., J.P. Morgan Securities LLC and RBC Capital Markets, LLC acted as representatives of the initial purchasers and joint book-running managers for the issuance of our 7.40% Senior Notes due 2028. We used the proceeds from the issuance of our 7.40% Senior Notes due 2028 for general corporate purposes, including to support the growth of AUM and for our future liquidity requirements.
Item 16. Exhibits and Financial Statement Schedules
(a)Exhibits
| | | | | | | | |
| Number | | Description |
| | |
| 1.1* | | |
| | |
| 2.1 | | |
| | |
| 3.1 | | |
| | |
| 3.2 | | |
| | |
| 3.3 | | |
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| 3.4 | | |
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| 3.5 | | |
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| 3.6 | | |
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| 3.7 | | |
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| 3.8 | | |
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| 3.9 | | |
| | |
3.10 | | |
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| 4.1 | | |
| | |
| 4.2 | | |
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| Number | | Description |
| | |
| 4.3 | | |
| | |
| 4.4* | | |
| | |
| 4.5 | | |
| | |
| 4.6 | | Registration Rights Agreement for the 7.400% Senior Notes due 2028, dated as of January 13, 2023, among F&G, the guarantors named therein BofA Securities, Inc., J.P. Morgan Securities LLC and RBC Capital Markets, LLC, as representatives of the initial purchasers (incorporated by reference to Exhibit 10.1 to F&G’s Current Report on Form 8-K, filed on January 13, 2023). |
| | |
| 4.7 | | Indenture, dated as of April 20, 2018, among Fidelity Guaranty & Life Holdings, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee, including the form of 5.50% Note due 2025 (incorporated by reference to Exhibit No. 4.1 to F&G’s Amendment No. 3 to Form 10, filed with the SEC on November 10, 2022). |
| | |
| 4.8 | | |
| | |
| 4.9 | | Second Supplemental Indenture, dated as of June 1, 2020, among Fidelity National Financial, Inc., Fidelity & Guaranty Life Holdings, Inc., and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit No. 4.3 to F&G’s Amendment No. 3 to Form 10, filed with the SEC on November 10, 2022). |
| | |
4.10 | | |
| | |
| 4.11 | | |
| | |
| 5.1* | | |
| | |
| 5.2* | | |
| | |
| 10.1 | | |
| | |
| 10.2 | | |
| | |
| 10.3 | | |
| | |
10.4(1) | | |
| | |
10.5(1) | | |
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10.6(1) | | |
| | |
| | | | | | | | |
| Number | | Description |
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10.7(1) | | |
| | |
| 10.8 | | |
| | |
10.9(1) | | |
| | |
10.10(1) | | |
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| 10.11 | | |
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| 10.12 | | |
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| 10.13 | | |
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| 10.14 | | |
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| 10.15 | | |
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| 10.16 | | |
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| 10.17 | | |
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| 10.18 | | |
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| 10.19 | | |
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10.20 | | |
| | |
| | | | | | | | |
| Number | | Description |
| | |
| 10.21 | | |
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| 10.22 | | |
| | |
| 10.23 | | |
| | |
| 10.24 | | |
| | |
| 10.25 | | |
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| 10.26 | | |
| | |
| 10.27 | | |
| 10.28 | | Credit Agreement, dated as of November 22, 2022, by and among F&G, as the borrower, the guarantors party thereto, Bank of America, N.A., as administrative agent, and the financial institutions party thereto as lenders (incorporated by reference to Exhibit No. 10.1 to F&G’s Current Report on Form 8-K, filed with the SEC on November 22, 2022). |
| | |
| 10.29 | | |
| | |
| 21.1 | | |
| | |
| 23.1* | | |
| | |
| 23.2* | | |
| | |
23.3* | | |
24* | | |
| | |
25.1* | | |
| | |
| 107* | | |
__________________
*Filed herewith.
(1)A management or compensatory plan or arrangement.
(b)Financial Statement Schedules
Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer, or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The undersigned registrants hereby undertake that:
(1)For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa, on November 27, 2023.
| | | | | | | | |
| F&G ANNUITIES & LIFE, INC. |
| | |
| By: | /s/ Jodi Ahlman |
| | Jodi Ahlman |
| | General Counsel & Secretary |
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints each of Jodi Ahlman and Wendy J.B. Young as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments and registration statements filed pursuant to Rule 462 under the Securities Act of 1933) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto the said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that the said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
/s/ Christopher O. Blunt | | President & Chief Executive Officer (Principal Executive Officer); Director | | November 27, 2023 |
| Christopher O. Blunt | | | |
| | | | |
/s/ Wendy J.B. Young | | Chief Financial Officer (Principal Financial and Accounting Officer) | | November 27, 2023 |
| Wendy J.B. Young | | | |
| | | | |
/s/ William P. Foley, II | | Chairman of the Board | | November 27, 2023 |
| William P. Foley, II | | | | |
| | | | |
/s/ Douglas K. Ammerman | | Director | | November 27, 2023 |
| Douglas K. Ammerman | | | | |
| | | | |
/s/ Celina J. Wang Doka | | Director | | November 27, 2023 |
| Celina J. Wang Doka | | | | |
| | | | |
/s/ Douglas Martinez | | Director | | November 27, 2023 |
| Douglas Martinez | | | | |
| | | | |
/s/ Michael Nolan | | Director | | November 27, 2023 |
| Michael Nolan | | | | |
| | | | |
/s/ Raymond Quirk | | Director | | November 27, 2023 |
| Raymond Quirk | | | | |
| | | | |
/s/ John D. Rood | | Director | | November 27, 2023 |
| John D. Rood | | | | |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa on November 27, 2023.
| | | | | | | | |
| CF BERMUDA HOLDINGS LIMITED |
| | |
| By: | /s/ Jodi Ahlman |
| | Jodi Ahlman |
| | Senior Vice President, General Counsel & Secretary |
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints each of Jodi Ahlman and Wendy J.B. Young as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments and registration statements filed pursuant to Rule 462 under the Securities Act of 1933) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto the said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that the said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
/s/ Christopher O. Blunt | | President & Chief Executive Officer (Principal Executive Officer); Director | | November 27, 2023 |
| Christopher O. Blunt | | | |
/s/ Wendy J.B. Young | | Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer); Director | | November 27, 2023 |
| Wendy J.B. Young | | | |
| | | | |
/s/ John D. Currier | | Director | | November 27, 2023 |
| John D. Currier | | | | |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa on November 27, 2023.
| | | | | | | | |
| FGL US HOLDINGS INC. |
| | |
| By: | /s/ Jodi Ahlman |
| | Jodi Ahlman |
| | Senior Vice President, General Counsel & Secretary |
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints each of Jodi Ahlman and Wendy J.B. Young as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments and registration statements filed pursuant to Rule 462 under the Securities Act of 1933) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto the said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that the said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
/s/ Christopher O. Blunt | | President & Chief Executive Officer (Principal Executive Officer); Director | | November 27, 2023 |
| Christopher O. Blunt | | | |
| | Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer); Director | | |
/s/ Wendy J.B. Young | | | November 27, 2023 |
| Wendy J.B. Young | | | |
| | | | |
/s/ John D. Currier | | Director | | November 27, 2023 |
| John D. Currier | | | | |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa on November 27, 2023.
| | | | | | | | |
| FIDELITY & GUARANTY LIFE BUSINESS
SERVICES, INC. |
| | |
| By: | /s/ Jodi Ahlman |
| | Jodi Ahlman |
| | Senior Vice President, General Counsel & Secretary |
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints each of Jodi Ahlman and Wendy J.B. Young as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments and registration statements filed pursuant to Rule 462 under the Securities Act of 1933) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto the said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that the said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
/s/ Christopher O. Blunt | | President & Chief Executive Officer (Principal Executive Officer); Director | | November 27, 2023 |
| Christopher O. Blunt | | | |
| | | | |
/s/ Wendy J.B. Young | | Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) | | November 27, 2023 |
| Wendy J.B. Young | | | |
| | | | |
/s/ John D. Currier | | Director | | November 27, 2023 |
| John D. Currier | | | | |
| | | | |
/s/ Marie Norcia | | Director | | November 27, 2023 |
Marie Norcia | | | | |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa on November 27, 2023.
| | | | | | | | |
| FIDELITY & GUARANTY LIFE HOLDINGS, INC. |
| | |
| By: | /s/ Jodi Ahlman |
| | Jodi Ahlman |
| | Senior Vice President, General Counsel & Secretary |
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints each of Jodi Ahlman and Wendy J.B. Young as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments and registration statements filed pursuant to Rule 462 under the Securities Act of 1933) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto the said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that the said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
/s/ Christopher O. Blunt | | President & Chief Executive Officer (Principal Executive Officer); Director | | November 27, 2023 |
| Christopher O. Blunt | | | |
| | | | |
/s/ Wendy J.B. Young | | Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer); Director | | November 27, 2023 |
| Wendy J.B. Young | | | |
| | | | |
/s/ John D. Currier | | Director | | November 27, 2023 |
| John D. Currier | | | | |
Calculation of Filing Fee Tables
Form S-1
(Form Type)
Issuer:
F&G Annuities & Life, Inc.
Guarantors:
CF Bermuda Holdings Limited
FGL US Holdings Inc.
Fidelity & Guaranty Life Business Services, Inc.
Fidelity & Guaranty Life Holdings, Inc.
(Exact Name of Registrants as Specified in their Charters)
Table 1: Newly Registered and Carry Forward Securities
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security Type | Security Class Title | Fee Calculation or Carry Forward Rule | Amount Registered | Proposed Maximum Offering Price Per Unit | Maximum Aggregate Offering Price | Fee Rate | Amount of Registration Fee |
| Newly Registered Securities |
| Fees to be Paid | Debt | [ ]% Senior Notes due 2053 | Rule 457(o) | $287,500,000 | 100% | $287,500,000 (1) | 0.0001476 | $42,435(2) |
| Debt | Guarantees of [ ]% Senior Notes due 2053(3) | Other | __ | __ | __ | __ | __(4) |
| Fees Previously Paid | __ | __ | __ | __ | | __ | | __ |
| Carry Forward Securities |
| Carry Forward Securities | __ | __ | __ | __ | | __ | | __ |
| Total Offering Amounts | | $287,500,000 (1) | | $42,435 |
| Total Fees Previously Paid | | | | __ |
| Total Fee Offsets | | | | __ |
| Net Fee Due | | | | $42,435 |
(1)Represents the maximum aggregate principal amount of the notes to be offered in the offering to which the registration statement relates.
(2)Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
(3)No separate consideration will be received for the guarantees.
(4)Pursuant to Rule 457(n) under the Securities Act of 1933, no additional registration fee is due for the guarantees.
F&G Annuities & Life, Inc.
$[_____] [____]% Senior Notes due 2053
Underwriting Agreement
[_______], 2023
Wells Fargo Securities, LLC
550 South Tryon Street, 5th Floor
Charlotte, North Carolina 28202
BofA Securities, Inc.
One Bryant Park
New York, New York 10036
Morgan Stanley & Co. LLC
1585 Broadway, 29th Floor
New York, New York 10036
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th floor
New York, New York 10019
UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
As Representatives of the several Underwriters listed in Schedule 1 hereto
Ladies and Gentlemen:
F&G Annuities & Life, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom Wells Fargo Securities, LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC are acting as representatives (the “Representatives”), $[___] aggregate principal amount of the Company’s [___]% Senior Notes due 2053 (the “Initial Securities”) and, at the option of the Representatives acting on behalf of the Underwriters, up to an additional $[___] aggregate principal amount of such [___]% Senior Notes due 2053 (the “Option Securities”), solely to cover overallotments. The Initial Securities and the Option Securities are herein referred to, collectively, as the “Securities.”
The Securities will be issued pursuant to an Indenture, dated as of January 13, 2023 (the “Base Indenture”), among the Company, the guarantors listed in Schedule 2 hereto (the
“Guarantors”) and Citibank, N.A., as trustee (the “Trustee”), as amended and supplemented by the Second Supplemental Indenture, dated as of January 26, 2023 (the “Second Supplemental Indenture”), between CF Bermuda Holdings Limited, a Bermuda exempted company, and the Trustee, and as will be supplemented by the Third Supplemental Indenture, to be dated as of [_______], 2023 (together with the Base Indenture and the Second Supplemental Indenture, the “Indenture”), among the Company, the Guarantors and the Trustee, and will be guaranteed on an unsecured senior basis by each of the Guarantors (the “Guarantees”).
The Company and the Guarantors have prepared and filed with the Securities and Exchange Commission (the “Commission”), in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), a registration statement on Form S-1 (Registration No. 333-[_____]), including the related preliminary prospectus, for the registration of the Securities and the Guarantees under the Securities Act. Promptly after execution and delivery of this Agreement, the Company and the Guarantors will prepare and file a prospectus in accordance with the provisions of Rule 430A and Rule 424(b) under the Securities Act. The information included in such prospectus that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to Rule 430A(b) under the Securities Act is herein referred to as the “Rule 430A Information”. Such registration statement, including the pre-effective amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A Information, is herein referred to as the “Registration Statement”. Any registration statement filed pursuant to Rule 462(b) under the Securities Act relating to the Securities and the Guarantees is herein referred to as the “Rule 462(b) Registration Statement” and, after such filing, the term “Registration Statement” shall include the Rule 462(b) Registration Statement. Each prospectus that was used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after the effectiveness of the Registration Statement but prior to the execution and delivery of this Agreement, is herein referred to as a “preliminary prospectus”. The final prospectus, in the form first furnished to the Underwriters for use in connection with the offering of the Securities, is herein referred to as the “Prospectus”.
For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copies thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system or any successor system (“EDGAR”). All references in this Agreement to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing, or to financial statements, schedules or other information that is “contained,” “included” or “stated” (or other references of like import) therein, shall be deemed to include the information contained in documents filed by the Company with the Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement thereto pursuant to Item 12 and General Instruction VII of Form S-1 under the Securities Act, to the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities Act.
As used in this Agreement:
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus”, as defined in Rule 433 under the Securities Act, including, without limitation, any “free writing prospectus” (as defined in Rule 405 under the Securities Act) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show for an offering that is a written communication” within the meaning of Rule 433(d)(8)(i) under the Securities Act, whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) under the Securities Act because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act.
“Issuer General Use Free Writing Prospectus” means the Pricing Term Sheet (as defined herein) and any other Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “bona fide electronic road show”, as defined in Rule 433 under the Securities Act), as listed in Part A of Annex A hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus, as listed in Part B of Annex A hereto.
“Time of Sale” means [____] [a.][p.]m., New York City time, on [_______], 2023.
“Time of Sale Information” means the most recent preliminary prospectus that is distributed to investors prior to the Time of Sale, the Pricing Term Sheet and each other Issuer General Use Free Writing Prospectus, all considered together.
The Company and the Guarantors hereby confirm their agreement with the several Underwriters concerning the purchase and resale of the Securities, as follows:
1.Purchase and Sale of the Securities.
(a)The Company agrees to issue and sell the Initial Securities to the several Underwriters pursuant to the terms of, and subject to the conditions set forth in, this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Initial Securities set forth opposite such Underwriter’s name in Schedule 1 hereto at a price equal to (i) [_____]% of the principal amount thereof for retail orders (aggregating to a $[_____] purchase price in respect of $[_____] aggregate principal amount of the Initial Securities) (the “Retail Purchase Price”) and (ii) [_____]% of the principal amount thereof for institutional orders (aggregating to a $[_____] purchase price in respect of $[_____] aggregate principal amount of the Initial Securities).
Subject to the terms and conditions and in reliance upon the representations and warranties set forth in this Agreement, the Company hereby grants an option (the “Option”) to the several Underwriters to purchase, severally and not jointly, the Option Securities at the Retail Purchase Price, which Option may be exercised solely to cover overallotments in the sale of the Initial Securities by the Underwriters. The Option may be exercised in whole or in part at any time during the 30-day period from, and including, the Time of Sale, upon written notice by the Representatives to the Company setting forth the aggregate principal amount of Option Securities as to which the several Underwriters are exercising the Option, the time and date of payment and delivery for such Option Securities (any such time and date, the “Option Closing Date”) and the place of payment and delivery for such Option Securities. The Option Closing Date and any such place of payment and delivery shall be determined by the Representatives, but shall not be prior to the Initial Closing Date (as defined below) or, if after the Initial Closing Date, not earlier than two full business days (or, in the case of an Option Closing Date occurring on the Initial Closing Date, one full business day) after the exercise of the Option, unless otherwise agreed upon by the Representatives and the Company. If the Option is exercised as to all or any portion of the Option Securities, each of the Underwriters, severally and not jointly, agrees to purchase that proportion of the aggregate principal amount of Option Securities then being purchased that the aggregate principal amount of Initial Securities set forth opposite the name of such Underwriter in Schedule I hereto bears to the aggregate principal amount of Initial Securities, subject to such adjustments as the Representatives in their discretion shall make to eliminate any sales or purchases of an incremental principal amount of Option Securities less than $25.
The Company will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.
(b)The Company and the Guarantors acknowledge and agree that each Underwriter is acting solely in the capacity of an arm’s length contractual counterparty to the Company and the Guarantors with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company, the Guarantors or any other person. Additionally, neither the Representatives nor any other Underwriter is advising the Company, the Guarantors or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company and the Guarantors shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representatives nor any other Underwriter shall have any responsibility or liability to the Company or the Guarantors with respect thereto, other than the duties and obligations set forth in this Agreement. Any review by the Representatives or any other Underwriter of the Company, the Guarantors and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representatives or such other Underwriter, as the case may be, and shall not be on behalf of the Company, the Guarantors or any other person.
2.Payment and Delivery.
(a)Payment for and delivery of the Initial Securities will be made at the offices of Pillsbury Winthrop Shaw Pittman LLP, 31 West 52nd Street, New York, New York 10019, or by the electronic exchange of documents and certificates by the parties, at 10:00 a.m., New York City time, on [_______], 2023, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon in writing. The time and date of such payment and delivery is referred to herein as the “Initial Closing Date”. In addition, in the event that the Underwriters have exercised their Option to purchase any or all of the Option Securities, payment for and delivery of such Option Securities will be made at 10:00 a.m., New York City time, on the relevant Option Closing Date specified in the written notice from the Representatives to the Company, at the place described above or at such other place specified in such written notice, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon in writing. The Initial Closing Date and the Option Closing Date are referred to herein, together, as the “Closing Dates” and, individually, as a “Closing Date”.
(b)Payment for the Securities to be purchased on any Closing Date shall be made by wire transfer in immediately available funds to the account(s) specified in writing by the Company to the Representatives against delivery to the nominee of The Depository Trust Company (“DTC”), for the account of the Underwriters, of one or more global notes representing the Securities (collectively, the “Global Note”), with any transfer taxes payable in connection with the sale of the Securities to the Underwriters paid by the Company. The [applicable] Global Note will be made available for inspection by the Representatives not later than 1:00 p.m., New York City time, on the business day prior to such Closing Date.
3.Representations and Warranties of the Company and the Guarantors. The Company and the Guarantors jointly and severally represent and warrant to each Underwriter that:
(a)Registration Statement. The Registration Statement was originally filed with the Commission on [_____], 2023 and the required filing fee was paid at the time of filing. The Registration Statement was declared effective under the Securities Act on [_____], 2023. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued by the Commission under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened by the Commission. The Company and the Guarantors have complied with each request (if any) from the Commission for additional information with respect to the Registration Statement. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, at the Time of Sale and as of any Closing Date, complied and will comply in all material respects with the requirements of the Securities Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the related rules and regulations of the Commission. Neither the Registration Statement nor any post-effective amendment thereto, when considered together with the Registration Statement, at its effective
time, at the Time of Sale or as of any Closing Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided that the Company and the Guarantors make no representation or warranty with respect to (i) that part of the Registration Statement that constitutes the Statement of Eligibility on Form T-1 of the Trustee under the Trust Indenture Act or (ii) any statements or omissions made in the Registration Statement or any post-effective amendment thereto in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement or any post-effective amendment thereto (it being agreed that the only such information furnished by any Underwriter consists of the information set forth in Section 7(b) hereof). The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S T of the Commission (“Regulation S-T”).
(b)Prospectuses. No order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued by the Commission and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s or any Guarantor’s knowledge, threatened by the Commission. Each preliminary prospectus, the Prospectus and any amendment or supplement thereto, at the time each was filed with the Commission, and, in each case, at the Time of Sale and as of any Closing Date, complied and will comply in all material respects with the requirements of Securities Act and the related rules and regulations of the Commission. Neither the Prospectus nor any amendment or supplement thereto, as of its issue date, at the time of any filing thereof with the Commission pursuant to Rule 424(b) under the Securities Act or as of any Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation or warranty with respect to any statements or omissions made in the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Prospectus or any amendment or supplement thereto (it being agreed that the only such information furnished by any Underwriter consists of the information set forth in Section 7(b) hereof). Each preliminary prospectus delivered to the Underwriters for use in connection with the offering of the Securities and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(c)Issuer Free Writing Prospectuses. At the Time of Sale, none of (i) the Time of Sale Information and (ii) any individual Issuer Limited Use Free Writing Prospectus, when taken together with the Time of Sale Information, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation or warranty with respect to any statements or omissions
made in the Time of Sale Information or any Issuer Limited Use Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Time of Sale Information or any Issuer Limited Use Free Writing Prospectus (it being agreed that the only such information furnished by any Underwriter consists of the information set forth in Section 7(b) hereof). No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement, the Prospectus or any preliminary or other prospectus deemed to be a part thereof, or with the information contained in the Company’s periodic and current reports filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement, in each case that have not been superseded or modified.
(d)Not an Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company, any Guarantor or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Securities or the Guarantees and at the date hereof, neither the Company nor any Guarantor was or is an “ineligible issuer”, as defined in Rule 405 under the Securities Act, without taking account of any determination by the Commission pursuant to Rule 405 under the Securities Act that it is not necessary that the Company or any Guarantor be considered an ineligible issuer.
(e)Incorporated Information. The documents incorporated by reference in each of the Registration Statement, any preliminary prospectus and the Prospectus, (i) as of their respective dates, complied or will comply in all material respects with the requirements of the Exchange Act, and (ii) when taken together with the Time of Sale Information, did not, as of the Time of Sale, and, when taken together with the other information in the Prospectus, will not, at the Time of Sale and as of any Closing Date, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f)Financial Statements and Other Financial Information. The financial statements and financial statement schedules and the related notes thereto included or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus present fairly the consolidated financial position of the Company and its subsidiaries, as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods covered thereby; and the other financial information included or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus has been derived from the accounting records of the Company and its subsidiaries and presents fairly, on the basis stated in the Registration Statement, the Time of Sale Information and the Prospectus, the information shown thereby. All disclosures included or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G under the Exchange Act and Item 10 of Regulation S-K
under the Securities Act, to the extent applicable. All financial information and other disclosures required by Rule 3-10 and Rule 13-01 of Regulation S-X of the Commission (“Regulation S-X”) have been included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus and any such financial information or other disclosures are in conformity with the requirements of Rule 3-10 and Rule 13-01 of Regulation S-X; and no other financial information or supporting schedules are required to be included in the Registration Statement, the Time of Sale Information and the Prospectus under the Securities Act. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(g)No Material Adverse Change. Since the date of the most recent financial statements of the Company included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus, (i) there has not been any change in the capital stock (other than issuances of shares upon the exercise of stock options described as outstanding in, and the grant of options and awards under existing equity incentive plans described in, the Registration Statement, the Time of Sale Information and the Prospectus) or long-term debt of the Company or any material adverse change in the financial condition, prospects, earnings, business, properties, management, stockholder’s equity or results of operations of the Company and its subsidiaries, taken as a whole; (ii) neither the Company nor any of its subsidiaries has incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries, taken as a whole; and (iii) the Company has not sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, that is material to the Company and its subsidiaries, taken as a whole, or from any labor disturbance or dispute or any action, order or decree of any court or other governmental or regulatory authority, except in each case as otherwise disclosed in each of the Registration Statement, the Time of Sale Information and the Prospectus.
(h)Organization and Good Standing. Each of the Company, the Guarantors and the Significant Subsidiaries (as defined below) has been duly incorporated or organized, as the case may be, is validly existing as a corporation or limited liability company, as the case may be, in good standing under the laws of the jurisdiction in which it is chartered or organized with all requisite power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Registration Statement, the Time of Sale Information and the Prospectus, and is duly qualified to do business as a foreign corporation or limited liability company, as the case may be, and is in good standing under the laws of each jurisdiction that requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the financial condition, prospects, earnings, business, properties, management, stockholder’s equity or results of operations of the Company and its subsidiaries, taken as a whole, or on the performance by the Company and the Guarantors of their obligations under the Transaction Documents (as defined below) (a “Material Adverse Effect”). For purposes of this Agreement, “Significant Subsidiaries” means the subsidiaries of the Company listed in Schedule
3 to this Agreement. The subsidiaries listed in Schedule 3 to this Agreement are the only “significant subsidiaries” of the Company (as defined in Rule 1-02 of Regulation S-X).
(i)Guarantors and Significant Subsidiaries. All the outstanding shares of capital stock of each Guarantor and each Significant Subsidiary have been duly authorized and validly issued and are fully paid and non-assessable, and, except as otherwise set forth in the Registration Statement, the Time of Sale Information and the Prospectus, all outstanding shares of capital stock of the Guarantors and the Significant Subsidiaries are owned by the Company, either directly or through wholly owned subsidiaries, free and clear of any security interest, claim, lien or encumbrance.
(j)Insurance Subsidiaries. Each of the Company and the Significant Subsidiaries that are engaged in the business of insurance or reinsurance (each such Significant Subsidiary, an “Insurance Subsidiary”) is duly licensed or registered as a holding company or as an insurer or as a reinsurer, as the case may be, under the insurance laws (including, without limitation, laws that relate to companies that control insurance companies) and the rules, regulations and interpretations of the insurance regulatory authorities thereunder (collectively, the “Insurance Laws”) of each jurisdiction in which the conduct of its business as described in the Registration Statement, the Time of Sale Information and the Prospectus requires such licensing or registration (each such license or registration, an “Insurance License”), except where the failure to be so licensed or registered would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Significant Subsidiaries listed in Schedule 4 to this Agreement are the only “Insurance Subsidiaries” of the Company. Each of the Company and the Insurance Subsidiaries has made all required filings under applicable holding company statutes or other Insurance Laws in each jurisdiction where such filings are required, except where the failure to make such filings would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each of the Company and the Insurance Subsidiaries has all other necessary authorizations, approvals, orders, consents, certificates, permits, registrations and qualifications of and from all insurance regulatory authorities (together with the Insurance Licenses, the “Insurance Licenses and Authorizations”) necessary to conduct its business as described in the Registration Statement, the Time of Sale Information and the Prospectus and all of the foregoing are in full force and effect, except where the failure to have such Insurance Licenses and Authorizations in full force and effect would not, individually or in the aggregate, have a Material Adverse Effect. Each of the Company and the Insurance Subsidiaries has fulfilled and performed in all material respects all obligations necessary to maintain the Insurance Licenses and Authorizations. There is no pending or, to the knowledge of the Company or any Guarantor, threatened action, suit, proceeding or investigation that would, individually or in the aggregate, result in the revocation, termination or suspension of any of the Insurance Licenses and Authorizations that would reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Registration Statement, the Time of Sale Information and the Prospectus, none of the Company or the Insurance Subsidiaries has received any notification from any insurance regulatory authority or other governmental entity to the effect that any additional Insurance Licenses and Authorizations are needed to be obtained by the Company or any of the Insurance Subsidiaries.
(k)Capitalization. The Company has the capitalization as set forth in each of the Registration Statement, the Time of Sale Information and the Prospectus under the heading “Capitalization”.
(l)Due Authorization. Each of the Company and the Guarantors has the corporate power and authority to execute and deliver this Agreement, the Securities and the Indenture (including the Guarantees provided for therein) (collectively, the “Transaction Documents”), to the extent it is a party, and to perform its respective obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby has been duly and validly taken.
(m)The Indenture. The Indenture has been duly authorized by the Company and each of the Guarantors and, on any Closing Date, will be duly executed and delivered by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by the Trustee, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, rehabilitation, reorganization, moratorium, fraudulent transfer, preference or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (collectively, the “Enforceability Exceptions”), and except as rights to indemnification and contribution may be limited by applicable law. The Indenture conforms to the requirements of the Trust Indenture Act and has been duly qualified under the Trust Indenture Act.
(n)The Securities and the Guarantees. The Securities have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be validly issued and outstanding and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and except as rights to indemnification and contribution may be limited by applicable law, and will be entitled to the benefits of the Indenture. The Guarantees have been duly authorized by each of the Guarantors and, when the Securities have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be valid and legally binding obligations of each of the Guarantors enforceable against each of the Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and except as rights to indemnification and contribution may be limited by applicable law, and will be entitled to the benefits of the Indenture.
(o)Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors.
(p)No Violation or Default. None of the Company, the Guarantors or any of the Significant Subsidiaries is (i) in violation of any provision of its charter or bylaws or comparable constituting documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject; or (iii) in violation of any statute, law, rule, regulation, judgment, order or decree applicable to the Company, any of the Guarantors or any of the Significant Subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company, such Guarantor or such Significant Subsidiary or any of its properties, as applicable, except for, in the case of clauses (ii) and (iii), such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(q)No Conflicts. None of the execution and delivery of the Transaction Documents or the consummation of any of the other transactions herein or therein contemplated will conflict with or result in a breach or violation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, any of the Guarantors or any of the Significant Subsidiaries pursuant to, (i) the charter or bylaws or comparable constituting documents of the Company, any of the Guarantors or any of the Significant Subsidiaries; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company, any of the Guarantors or any of the Significant Subsidiaries is a party or bound or to which its or their property is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company, any of the Guarantors or any of the Significant Subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company, such Guarantor or such Significant Subsidiary or any of its properties, as applicable, except for, in the case of clauses (ii) and (iii), any conflict, breach, violation or imposition that would not have a Material Adverse Effect, except as set forth in the Registration Statement, the Time of Sale Information and the Prospectus.
(r)No Consents Required. No consent, approval, authorization or filing with or order of any court or governmental agency, authority or body is required in connection with the issuance and sale of the Securities by the Company or the issuance of the Guarantees by the Guarantors or for the execution, delivery and performance by the Company and each of the Guarantors of their respective obligations under each of the Transaction Documents to which each is a party, and, in each case, the consummation of the transactions contemplated hereby and thereby, except such consents, approvals, authorizations or filings as have been obtained or made or as may be required by the securities or blue sky laws of the various states and foreign securities laws in connection with the purchase and distribution of the Securities by the Underwriters.
(s)Legal Proceedings. No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company or any Guarantor, threatened that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(t)Independent Accountants. Ernst & Young LLP, which has audited certain of the financial statements of the Company contained or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus, is an independent public accounting firm with respect to the Company and its subsidiaries within the meaning of the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.
(u)Properties. Each of the Company and its subsidiaries owns or leases all such properties as are necessary to the conduct of its operations as presently conducted.
(v)No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders or other affiliates of the Company or any of its subsidiaries, on the other, that would be required by the Securities Act to be described in a registration statement on Form S-1 to be filed with the Commission and that is not so described in each of the Registration Statement, the Time of Sale Information and the Prospectus.
(w)Investment Company Act. Neither the Company nor any of the Guarantors is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in each of the Registration Statement, the Time of Sale Information and the Prospectus, none of them will be, required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).
(x)Taxes. Each of the Company, the Guarantors and the Significant Subsidiaries has filed all applicable tax returns that are required to be filed, taking into account any applicable extensions thereof (except in any case in which the failure so to file would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith and for which appropriate reserves have been made in accordance with GAAP or SAP (as defined below), as applicable, or as would not have a Material Adverse Effect and except as set forth in the Registration Statement, the Time of Sale Information and the Prospectus.
(y)Licenses and Permits. The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by all applicable authorities necessary to conduct their respective businesses, except where the failure to possess would not, individually or in the aggregate, have a Material Adverse Effect, except as set forth in the Registration Statement, the Time of Sale Information and the Prospectus, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in the Registration Statement, the Time of Sale Information and the Prospectus.
(z)No Labor Disputes. No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or is threatened or imminent, and neither the Company nor any Guarantor is aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, except as would not have a Material Adverse Effect and except as set forth in the Registration Statement, the Time of Sale Information and the Prospectus.
(aa)Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged, except as set forth in the Registration Statement, the Time of Sale Information and the Prospectus, or where the failure to do so would not have a Material Adverse Effect.
(bb)Compliance with ERISA. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or any of its subsidiaries would have any liability (each, a “Plan”) has been maintained in compliance in all respects with the requirements of all applicable statutes, rules and regulations, including ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, as applicable, no such Plan has failed (whether or not waived), or is reasonably expected to fail, to satisfy the minimum funding standards (within the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to such Plan; (iv) no such Plan is, or is reasonably expected to be, in “at risk status” (within the meaning of Section 303(i) of ERISA) or “endangered status” or “critical status” (within the meaning of Section 305 of ERISA); (v) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur with respect to any such Plan; (vi) except as described in the Registration Statement, the Time of Sale Information and the Prospectus, the fair market value of the assets under each qualified defined benefit pension plan (excluding, for these purposes, accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan (determined based on those assumptions used to fund such plan) and (vii) neither the Company nor any of its subsidiaries has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation, in the ordinary course and without default) in respect of a Plan.
(cc)Disclosure Controls. The Company, the Guarantors and the Significant Subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to
allow timely decisions regarding required disclosure. The Company, the Guarantors and the Significant Subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 under the Exchange Act.
(dd)Accounting Controls. The Company, the Guarantors and the Significant Subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive officers and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company, the Guarantors and the Significant Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP or SAP, as applicable, and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration Statement, the Time of Sale Information and the Prospectus, since December 31, 2022, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(ee)Insurance Statutory Financial Statements. The statutory financial statements of each Insurance Subsidiary (the “Statutory Financial Statements”) that have been most recently filed with the insurance regulator of the relevant jurisdiction for such Insurance Subsidiary have been prepared and fairly present in all material respects the admitted assets, liabilities, surplus, results of operations and cash flows of each of the Insurance Subsidiaries at the dates and for the periods (as the case may be) indicated, in accordance with statutory accounting practices prescribed or permitted by the insurance regulator of the relevant jurisdiction for such Insurance Subsidiary, as applicable (“SAP”), consistently applied throughout such period (excepted as specified therein).
(ff)Reserves. Each reserve and other liability amount in respect of the insurance business, including reserve and other liability amounts in respect of insurance policies, established or reflected in the Statutory Financial Statements was reviewed and certified by an independent actuary in accordance with applicable state insurance laws and regulations. Each of the Company and the Insurance Subsidiaries owns assets that qualify as admitted assets under the insurance laws, rules and regulations of the jurisdiction of domicile of such subsidiary in an amount equal to the sum of all the reserves and liability amounts and the minimum statutory capital and surplus as required by the Insurance Laws of the jurisdiction of domicile of the Company or such Insurance Subsidiary. The reserves set forth in the Statutory Financial Statements for the years indicated for payment of insurance policy benefits, losses, claims and
expenses were considered by management of the Company to be adequate as of the date of such Statutory Financial Statements to cover the total amount of all reasonably anticipated insurance liabilities of each of the Company and the Insurance Subsidiaries. Except as described in the Registration Statement, the Time of Sale Information and the Prospectus, the Company and the Insurance Subsidiaries have made no material change in their insurance reserving practices or practices with respect to impairment of investments since December 31, 2022.
(gg)Reinsurance. The reinsurance treaties, contracts and arrangements to which the Company or any Insurance Subsidiary is a party are in full force and effect and neither the Company nor any Insurance Subsidiary is in violation of, or in default in the performance, observance or fulfillment of, any obligation, agreement, covenant or condition contained therein, except for any such violations or defaults that, individually or in the aggregate, would not result in a Material Adverse Effect. To the knowledge of the Company, neither the Company nor any Insurance Subsidiary has received any written notice that any of the other parties to such treaties, contracts or arrangements intends not to, or will be unable to, perform such treaty, contract or arrangement, except as would not, individually or in the aggregate, result in a Material Adverse Effect.
(hh)No Investment Advisor Subsidiaries. No subsidiary of the Company is required to be licensed or registered pursuant to the Investment Advisers Act of 1940, as amended (the “Advisers Act”), or licensed or registered as an investment advisor pursuant to any other applicable law, rule or regulation, except where the failure to be so registered or licensed would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.
(ii)Broker-Dealer Subsidiaries. Fidelity & Guaranty Securities, LLC is the only subsidiary of the Company that is engaged in the business of acting as a broker-dealer (the “Broker-Dealer Subsidiary”). The Broker-Dealer Subsidiary is a duly registered broker-dealer under the Exchange Act, and in all jurisdictions where such registration, licensing or qualification is so required, except where the failure to be so registered, licensed or qualified would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. No subsidiary of the Company other than the Broker-Dealer Subsidiary is required to be registered or licensed as a broker-dealer under the Exchange Act or any other applicable law, rule or regulation, except where the failure to be so registered or licensed would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. The Broker-Dealer Subsidiary is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and such other organizations in which its membership is required in order to conduct its business as now conducted, except as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. The information contained in the Form BD filed by the Broker-Dealer Subsidiary was true and complete in all material respects at the time of filing and such Broker-Dealer Subsidiary has made all amendments to such form as it is required to make under any applicable law, except as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. Neither the Broker-Dealer Subsidiary nor any “associated person” (within the meaning of the Exchange Act) thereof is ineligible or disqualified pursuant to Section 15(b) of the Exchange Act to act as a broker-dealer or as an associated person of a registered broker-dealer. There is no action pending or, to the knowledge of the Company,
threatened or contemplated, that would be reasonably likely to result in the Broker-Dealer Subsidiary or any “associated person” (as defined in the Exchange Act or FINRA rules) thereof becoming ineligible to act in such capacity.
(jj)No Unlawful Payments. Neither the Company nor any of its subsidiaries nor any director, officer or employee of the Company or any of its subsidiaries nor, to the knowledge of the Company or any of the Guarantors, any agent, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption laws; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company and its subsidiaries have instituted, maintain and enforce, and will continue to maintain and enforce, policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
(kk)Compliance with Anti-Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company or any of its subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company or any of the Guarantors, threatened.
(ll)No Conflicts with Sanctions Laws. Neither the Company nor any of its subsidiaries, directors, officers or employees, nor, to the knowledge of the Company or any of the Guarantors, any agent, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His
Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation, the Crimea region and the non-government controlled areas of the Zaporizhzhia and Kherson Regions of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Cuba, Iran, North Korea and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or the target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.
(mm)No Restrictions on Subsidiaries. Except as disclosed in the Registration Statement, the Time of Sale Information and the Prospectus, no Guarantor or any Significant Subsidiary is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock or similar ownership interest, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.
(nn)No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.
(oo)No Stabilization. Neither the Company nor any of the Guarantors has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in, under the Exchange Act or otherwise, any stabilization or manipulation of the price of the Securities.
(pp)Margin Rules. Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in each of the Registration Statement, the Time of Sale Information and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(qq)Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) included or incorporated by reference in any of the Registration Statement, the Time of Sale Information and
the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(rr)Industry Statistical and Market Data. Nothing has come to the attention of the Company or any Guarantor that has caused the Company or such Guarantor to believe that the statistical, industry and market-related data included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.
(ss)IT Systems. The Company and its subsidiaries’ information technology hardware and software assets (collectively, “IT Systems”) are adequate in all material respects for the operation of the business of the Company and its subsidiaries as currently conducted. The Company and its subsidiaries have implemented and maintain commercially reasonable policies, procedures and safeguards to maintain the security of their confidential data (including all confidential personally identifiable data (“Confidential Data”)) collected, stored or owned by them in connection with their businesses. Except as described in the Registration Statement, the Time of Sale Information and the Prospectus, during the last three years, to the knowledge of the Company and the Guarantors, there have been no breaches or violations of the Company’s IT Systems with respect to any Confidential Data that have had a Material Adverse Effect. The Company and its subsidiaries are presently in material compliance with all laws and regulations and any court orders applicable to the security of IT Systems and Confidential Data.
(tt)Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.
(uu)Disclosure. The statements set forth in the Registration Statement, the Time of Sale Information and the Prospectus under the captions “Limitations on Validity and Enforceability of CF Bermuda Guarantee” and “Service of Process and Enforcement of Civil Liabilities”, insofar as they purport to summarize provisions of Bermuda law, fairly state in all material respects such provisions.
4.Further Agreements of the Company and the Guarantors. The Company and the Guarantors jointly and severally covenant and agree with each Underwriter that:
(a)Compliance with Securities Regulations and Commission Requests. The Company and the Guarantors, subject to Section 4(b), will comply with the requirements of Rule 430A under the Securities Act, and will advise the Representatives promptly, and confirm such advice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of
any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Securities or the Guarantees for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the offering of the Securities and the Guarantees. The Company and the Guarantors will effect all filings required under Rule 424(b) under the Securities Act, in the manner and within the time period required by Rule 424(b) under the Securities Act (without reliance on Rule 424(b)(8)), and will take such steps as they deem necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) under the Securities Act was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company and the Guarantors will make every reasonable effort to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.
(b)Continued Compliance with Securities Laws. The Company and the Guarantors will comply with the Securities Act and the related rules and regulations of the Commission so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration Statement, the Time of Sale Information and the Prospectus. If at any time during the period when a prospectus relating to the Securities and the Guarantees is (or, but for the exception afforded by Rule 172 under the Securities Act, would be) required to be delivered under the Securities Act in connection with sales of the Securities and the Guarantees, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the Time of Sale Information or the Prospectus in order that the Time of Sale Information or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Time of Sale Information or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the related rules and regulations of the Commission, the Company and the Guarantors will promptly (A) give the Representatives notice of such event, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Time of Sale Information or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representatives with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that neither the Company nor any Guarantor shall file or use any such amendment or supplement to which the Representatives or counsel for the Underwriters shall reasonably object. The Company and the Guarantors will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request.
(c)Delivery of Registration Statements. The Company and the Guarantors have delivered or, if requested, will deliver to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters.
(d)Delivery of Prospectuses. The Company and the Guarantors have delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company and the Guarantors hereby consent to the use of such copies for purposes permitted by the Securities Act. The Company and the Guarantors will deliver to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 under the Securities Act, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request.
(e)Issuer Free Writing Prospectuses. The Company and the Guarantors agree that, unless they obtains the prior written consent of the Representatives, they will not make any offer relating to the Securities or the Guarantees that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the Securities Act), or a portion thereof, required to be filed by the Company and the Guarantors with the Commission or retained by the Company and the Guarantors under Rule 433 under the Securities Act; provided that the Representatives will be deemed to have consented to the Issuer General Use Free Writing Prospectuses and the Issuer Limited Use Free Writing Prospectuses identified in Annex A hereto and any “road show for an offering that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representatives. The Company and the Guarantors represent that they have treated or agree that they will treat each such free writing prospectus consented to, or deemed consented to, by the Representatives as an “issuer free writing prospectus”, as defined in Rule 433 under the Securities Act, and that they have complied and will comply with the applicable requirements of Rule 433 under the Securities Act with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, any preliminary prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company and the Guarantors will promptly notify the Representatives and will promptly amend or supplement, at their own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f)Pricing Term Sheet. The Company and the Guarantors will prepare a pricing term sheet containing a description of the Securities and the Guarantees, substantially in the form of Annex B hereto, and will file such term sheet pursuant to Rule 433 under the Securities Act within the time required thereby (the “Pricing Term Sheet”). The Pricing Term Sheet is an Issuer Free Writing Prospectus for purposes of this Agreement.
(g)Blue Sky Compliance. The Company and the Guarantors will qualify the Securities and the Guarantees for offer and sale under the securities or blue sky laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for the distribution of the Securities by the Underwriters; provided, that neither the Company nor any of the Guarantors shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(h)Rule 158. The Company and the Guarantors will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available (which may be satisfied by filing with the Commission pursuant to EDGAR) to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the Securities Act.
(i)Clear Market. During the period from the date hereof through and including the date that is 30 days after the date hereof, the Company and each of the Guarantors will not, without the prior written consent of the Representatives, offer, sell, contract to sell or otherwise dispose of any debt securities that are substantially similar to the Securities.
(j)Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities as described in each of the Registration Statement, the Time of Sale Information and the Prospectus under the heading “Use of Proceeds”.
(k)DTC. The Company will assist the Underwriters in arranging for the Securities to be eligible for clearance and settlement through DTC.
(l)NYSE. The Company will use its best efforts to effect the listing of the Securities on the New York Stock Exchange (the “NYSE”), subject to official notice of issuance, to facilitate the commencement of trading on the NYSE within 30 days of the Initial Closing Date.
(m)No Stabilization. Neither the Company nor any of the Guarantors will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in, under the Exchange Act or otherwise, any stabilization or manipulation of the price of the Securities.
(n)Reporting Requirements. The Company, during the period when a prospectus relating to the Securities and the Guarantees is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act in connection with sales of the
Securities and the Guarantees, will file with the Commission, within the time periods required by the Exchange Act, all reports required to be filed pursuant to Section 13 or 15(d) the Exchange Act and all proxy statements required to be filed pursuant to Section 14 the Exchange Act. Additionally, the Company shall report the use of proceeds from the issuance of the Securities as may be required under Rule 463 under the Securities Act.
The Representatives, on behalf of the several Underwriters, may, in their sole discretion, waive in writing the performance by the Company or the Guarantors of any one or more of the foregoing covenants or extend the time for their performance.
5.Certain Agreements of the Underwriters. Each Underwriter agrees that, unless it obtains the prior written consent of the Company and the Guarantors, it will not make any offer relating to the Securities or the Guarantees that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the Securities Act), or a portion thereof, required to be filed by the Company and the Guarantors with the Commission or retained by the Company and the Guarantors under Rule 433 under the Securities Act; provided that the Company and the Guarantors will be deemed to have consented to the Issuer General Use Free Writing Prospectuses and the Issuer Limited Use Free Writing Prospectuses identified in Annex A hereto and any “road show for an offering that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Company and the Guarantors.
6.Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase Securities on any Closing Date as provided herein is subject to the performance by the Company and each of the Guarantors of their respective covenants and other obligations hereunder and to the following additional conditions:
(a)Effectiveness of Registration Statement; Rule 430A Information. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and, as of any Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated; and the Company and the Guarantors have complied with each request (if any) from the Commission for additional information. A prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) under the Securities Act, without reliance on Rule 424(b)(8) under the Securities Act, or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A under the Securities Act. The Prospectus shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) under the Securities Act, without reliance on Rule 424(b)(8) under the Securities Act, and the Pricing Term Sheet and any other material required to be filed by the Company and the Guarantors pursuant to Rule 433(d) under the Securities Act shall have been filed with the Commission in the manner and within the time frame required by Rule 433 under the Securities Act.
(b)Representations and Warranties. The representations and warranties of the Company and the Guarantors contained herein shall be true and correct on the date hereof and on and as of any Closing Date; and the statements of the Company, the Guarantors and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of any Closing Date.
(c)No Downgrade. Since the date hereof, (i) no downgrading shall have occurred in the rating accorded the Securities or any other debt securities or preferred stock issued or guaranteed by the Company or any of its subsidiaries that are rated by a “nationally recognized statistical rating organization”, as such term is defined under Section 3(a)(62) under the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, any such rating (other than an announcement with positive implications of a possible upgrading).
(d)No Material Adverse Change. No event or condition of a type described in Section 3(h) hereof shall have occurred or shall exist, which event or condition is not described in each of the Registration Statement, the Time of Sale Information or the Prospectus (excluding any amendments or supplements thereto), the effect of which, in the judgment of the Representatives, makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement, the Registration Statement, the Time of Sale Information or the Prospectus.
(e)Officer’s Certificate. The Representatives shall have received on and as of any Closing Date a certificate of an executive officer of the Company and of each Guarantor who has specific knowledge of the Company’s or such Guarantor’s financial matters and is satisfactory to the Representatives (i) confirming that such officer has reviewed the Registration Statement, the Time of Sale Information and the Prospectus and, to the knowledge of such officer, no stop order suspending the effectiveness of the Registration Statement under the Securities Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to their knowledge, contemplated by the Commission, (ii) confirming that the representations and warranties of the Company and the Guarantors in this Agreement are true and correct as of such Closing Date and that the Company and the Guarantors have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder on or before such Closing Date and (iii) to the effect set forth in Sections 6(c) and 6(d) hereof.
(f)Comfort Letters.
(i)On the date of this Agreement and on any Closing Date, Ernst & Young LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Representatives, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference in each of the Registration Statement, the Time
of Sale Information and the Prospectus; provided, that the letter delivered on any Closing Date shall use a “cut-off” date no more than three business days prior to such Closing Date; and
(ii)on the Initial Closing Date, the Company shall have furnished to the Representatives a certificate, dated such Closing Date and addressed to the Underwriters, of its chief financial officer with respect to certain financial data identified therein, providing “management comfort” with respect to such information, in form and substance reasonably satisfactory to the Representatives.
(g)Opinions and 10b-5 Statement of Counsel for the Company.
(i)Skadden, Arps, Slate, Meagher & Flom LLP, United States counsel for the Company, shall have furnished to the Representatives, at the request of the Company, their written opinions and 10b-5 statement, dated the applicable Closing Date and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives; and
(ii)ASW Law Limited, Bermuda counsel for the Company, shall have furnished to the Representatives, at the request of the Company, their written opinions, dated the applicable Closing Date and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives.
(h)Opinion of General Counsel for the Company. Jodi Ahlman, General Counsel of the Company, shall have furnished to the Representatives her written opinion dated the applicable Closing Date and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Annex C hereto.
(i)Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representatives shall have received on and as of any Closing Date a written opinion and 10b-5 statement, addressed to the Underwriters, of Pillsbury Winthrop Shaw Pittman LLP, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.
(j)No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of any Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of such Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees.
(k)Good Standing. The Representatives shall have received on any Closing Date satisfactory evidence of the good standing of the Company, the Guarantors and the Insurance Subsidiaries in their respective jurisdictions of organization and their good standing in such other jurisdictions as the Representatives may reasonably request, in each case in writing or any
standard form of telecommunication from the appropriate governmental authorities of such jurisdictions.
(l)DTC. The Securities shall be eligible for clearance and settlement through DTC.
(m)NYSE. On or prior to the Initial Closing Date, the Company shall have filed an application for the listing of the Securities on the NYSE.
(n)Indenture and Securities. The Indenture shall have been duly executed and delivered by a duly authorized officer of the Company, each of the Guarantors and the Trustee and the Securities shall have been duly executed and delivered by a duly authorized officer of the Company and duly authenticated by the Trustee.
(o)Rating Agency Letters. On or prior to the Initial Closing Date, the Representatives shall have received satisfactory evidence that the Securities have received at least the ratings set forth in the Time of Sale Information and that such ratings are in effect at the Initial Closing Date.
(p)Additional Documents. On or prior to any Closing Date, the Company and the Guarantors shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.
7.Indemnification and Contribution.
(a)Indemnification of the Underwriters. The Company and each of the Guarantors jointly and severally agree to indemnify and hold harmless each Underwriter, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each affiliate of each Underwriter within the meaning of Rule 405 under the Securities Act and each director, officer and agent of each Underwriter against any and all losses, claims, damages or liabilities, joint or several, to which they are any of them may become subject under the Securities Act, the Exchange Act or other U.S. federal or state statutory law or regulation, at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages, liabilities or actions in respect thereof arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any post-effective amendment thereto), including the Rule 430A Information, or in any preliminary prospectus, any Issuer Free Writing Prospectus, any of the other Time of Sale Information or the Prospectus (or any amendment or supplement thereto), or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action, except insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon, any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter expressly for use therein (which consists only of the information specified in Section 7(b) hereof). This indemnity agreement will be in addition to any liability that the Company may otherwise have.
(b)Indemnification of the Company and the Guarantors. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, each of the Guarantors, each of their respective directors, officers and trustees, and each person, if any, who controls the Company or any of the Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages, liabilities or expenses to which the Company, such Guarantor or any such director, officer or controlling person may become subject under the Securities Act, the Exchange Act or other U.S. federal or state statutory law or regulation, at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such losses, claims, damages, liabilities or expenses or actions in respect thereof arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any post-effective amendment thereto), including the Rule 430A Information, or in any preliminary prospectus, any Issuer Free Writing Prospectus, any of the other Time of Sale Information or the Prospectus (or any amendment or supplement thereto), or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter expressly for use in the Registration Statement, any preliminary prospectus, any Issuer Free Writing Prospectus, any of the other Time of Sale Information or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information consists of the following paragraphs in the “Underwriting (Conflicts of Interest)” section of the Prospectus: the first sentence of the eighth paragraph concerning purchases in the open market, the first sentence of the ninth paragraph concerning penalty bids and the third sentence of the twelfth paragraph concerning market making; and, subject to the limitation set forth immediately preceding this clause, will reimburse any legal or other expenses reasonably incurred by the Company, such Guarantor or any such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability, expense or action. This indemnity agreement will be in addition to any liability that the Underwriters may otherwise have.
(c)Notice and Procedures. As promptly as reasonably practicable after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and only to the extent it is materially prejudiced as a result thereof and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in Sections 7(a) or 7(b) hereof. The
indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the reasonable fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties, except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ one separate counsel (in addition to one local counsel in each applicable jurisdiction), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (w) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (x) the defendants in any such action include both the indemnified party and the indemnifying party, and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be one or more legal defenses available to it that are different from or additional to those available to the indemnifying party; (y) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after receipt of notice of the institution of such action; or (z) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party, then, in each such case, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties at the expense of the indemnifying party. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (A) the indemnified party shall have employed separate counsel in accordance with the immediately preceding sentence (it being understood, however, that in connection with such action, the indemnifying party shall not be liable for the reasonable fees and expenses of more than one separate counsel (in addition to one local counsel in each applicable jurisdiction) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Underwriters in the case of Section 7(a) hereof or the Company and the Guarantors in the case of Section 7(b) hereof, representing the indemnified parties under such Section 7(a) or 7(b) hereof, as the case may be, who are parties to such action or actions), (B) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party or (C) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party and shall be paid as they are incurred. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such
indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless such indemnifying party waived in writing its rights under this Section 7, in which case the indemnified party may effect such a settlement without such consent. No indemnifying party shall be liable under this Section 7 for any settlement of any claim or action (or threatened claim or action) effected without its written consent, which shall not be unreasonably withheld, but if a claim or action settled with its written consent, or if there be a final judgment for the plaintiff with respect to any such claim or action, each indemnifying party jointly and severally agrees, subject to the exceptions and limitations set forth above, to indemnify and hold harmless each indemnified party from and against any and all losses, claims, damages or liabilities (and legal and other expenses as set forth above) incurred by reason of such settlement or judgment. An indemnifying party will not, without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (1) includes an unconditional release, in form and substance satisfactory to the indemnified party, of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (2) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of the indemnified party.
(d)Contribution. In the event that the indemnity provided in Section 7(a) or 7(b) is unavailable to or insufficient to hold harmless an indemnified party for any losses, claims, damages, liabilities or expenses (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable contributions, severally agrees to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending any loss, claim, damage, liability or action) (collectively “Losses”) to which the Company and the Guarantors and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties, on the one hand, and the indemnified party, on the other hand, from the offering of the Securities and (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits, but also the relative fault of the indemnifying party or parties, on the one hand, and the indemnified party, on the other hand, in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof); provided, however, that in no case shall any Underwriter be responsible for any amount in excess of the total underwriting discount received by such Underwriter hereunder, less the aggregate amount of any damages such Underwriter has otherwise agreed to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact. The relative benefits received by the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand, shall be deemed to be in the proportion as the total proceeds from the offering of the Securities (before deducting expenses) received by the Company bears to the total underwriting discount received by the applicable Underwriter in respect of the Securities, in each case as set forth in the table on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company and the Guarantors, on the one hand, or the Underwriters pursuant to Section 7(b) hereof, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission and any other equitable considerations appropriate in the circumstances. The Company, the Guarantors and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 7(d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Each Underwriter’s obligation to contribute hereunder shall be several and not joint. For purposes of this Section 7, each person who controls an Underwriter within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee, Affiliate and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company or any of the Guarantors within the meaning of either the Securities Act or the Exchange Act and each officer and director of the Company or any of the Guarantors shall have the same rights to contribution as the Company and such Guarantor, subject in each case to the applicable terms and conditions of this Section 7(d).
(e)Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.
8.Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Company, if after the execution and delivery of this Agreement and on or prior to any Closing Date (i) trading generally shall have been suspended or materially limited on the NYSE or the over-the-counter market; (ii) trading of any securities issued or guaranteed by the Company or any of the Guarantors shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; (iv) a material disruption occurs in commercial banking or securities settlement or clearance services in the United States; or (v) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement, the Registration Statement, the Time of Sale Information or the Prospectus.
9.Defaulting Underwriter.
(a)If, on any Closing Date, any Underwriter defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Securities by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such default by
any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such Securities on such terms. If other persons become obligated or agree to purchase the Securities of a defaulting Underwriter, either the non-defaulting Underwriters or the Company may postpone such Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement, the Time of Sale Information or the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Registration Statement, the Time of Sale Information or the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Securities that a defaulting Underwriter agreed but failed to purchase.
(b)If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in Section 9(a) hereof, the aggregate principal amount of such Securities that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Securities that such Underwriter agreed to purchase hereunder plus such Underwriter’s pro rata share (based on the principal amount of Securities that such Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made.
(c)If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in Section 9(a) hereof, the aggregate principal amount of such Securities that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right described in Section 9(b) hereof, then this Agreement shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the Company or the Guarantors, except that the Company and each of the Guarantors will continue to be liable for the payment of expenses as set forth in Section 10 hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in effect.
(d)Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company, the Guarantors or any non-defaulting Underwriter for damages caused by its default.
10.Payment of Expenses.
(a)Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company and each of the Guarantors jointly and severally agree to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder, including without limitation, (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and any taxes payable in that connection; (ii) the costs incident to the preparation and printing of the Registration Statement, the Time of Sale Information or the Prospectus (including any amendment or supplement thereto) and the distribution thereof, including the required filing fee in connection with the filing of the Registration Statement; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Company’s and the Guarantors’ counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification of the Securities under the laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters in an amount not to exceed $10,000); (vi) any fees charged by rating agencies for rating the Securities; (vii) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties); (viii) all expenses and application fees incurred in connection with the approval of the Securities for book-entry transfer by DTC; (ix) the fees and expenses incurred in connection with the listing of the Securities on the NYSE; and (x) all expenses incurred by the Company and the Guarantors in connection with any “road show” presentation to potential investors. For the avoidance of doubt, the Company and the Guarantors shall not be responsible for any fees and expenses of counsel for the Underwriters (other than any such fees and expenses not to exceed $10,000 related to the preparation, printing and distribution of a Blue Sky Memorandum).
(b)If (i) this Agreement is terminated pursuant to Section 8 hereof, (ii) the Company for any reason fails to tender the Securities for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Securities for any reason permitted under this Agreement, the Company and each of the Guarantors jointly and severally agree to reimburse the Underwriters for all out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby.
11.Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to herein, and the affiliates of the Underwriters referred to in Section 7 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Securities from any Underwriter shall be deemed to be a successor merely by reason of such purchase.
12.Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, the Guarantors and the Underwriters contained in this Agreement or made by or on behalf of the Company, the Guarantors or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, the Guarantors or the Underwriters.
13.Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; and (d) the term “written communication” has the meaning set forth in Rule 405 under the Securities Act.
14.Compliance with USA PATRIOT Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company and the Guarantors, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
15.Miscellaneous.
(a)Authority of the Representatives. Any action by the Underwriters hereunder may be taken by Wells Fargo Securities, LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC, on behalf of the Underwriters, and any such action taken by Wells Fargo Securities, LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC shall be binding upon the Underwriters.
(b)Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication or other electronic means. Notices to the Underwriters shall be given to the Representatives c/o Wells Fargo Securities, LLC, 550 South Tryon Street, 5th Floor, Charlotte, North Carolina 28202, Attention: Transaction Management, Email: tmgcapitalmarkets@wellsfargo.com, Facsimile: (704) 410-0326; c/o BofA Securities, Inc., 114 West 47th Street, NY8-114-07-01, New York, New York 10036, Attention: High Grade Debt Capital Markets Transaction Management/Legal, Email: dg.hg_ua_notices@bofa.com, Facsimile: (212) 901-7881; c/o Morgan Stanley & Co. LLC, 1585 Broadway, 29th Floor, New York, New York 10036, Attention: Investment Banking Division, Facsimile: (212) 507-8999; c/o RBC Capital Markets, LLC, Brookfield Place, 200 Vesey Street, 8th Floor, New York, New York 10281, Attention: DCM Transaction Management/Scott Primrose, Telephone: (212) 618-7706, Email: TMGUS@rbccm.com; and c/o UBS Securities LLC, 1285 Avenue of the Americas, New York, New York 10019, Attention: Fixed Income Syndicate, Facsimile: (203) 719-0495. Notices to the Company and the Guarantors shall be given at 801 Grand Avenue, Suite 2600, Des Moines, Iowa 50309, Attention: General Counsel.
(c)Governing Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York.
(d)Submission to Jurisdiction. To the fullest extent permitted by law, each of the Company and each of the Guarantors hereby submits to the exclusive jurisdiction of the U.S.
federal and New York state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. To the fullest extent permitted by law, each of the Company and each of the Guarantors waives any objection which it may now or hereafter have to the laying of venue of any such suit or proceeding in such courts. To the fullest extent permitted by law, each of the Company and each of the Guarantors agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the Company and such Guarantor and may be enforced in any court to the jurisdiction of which the Company or such Guarantor is subject by a suit upon such judgment.
(e)WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(f)Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument. The words “execution”, signed” and “signature” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement (to the extent permissible under governing documents) shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including, without limitation, the Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
(g)Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(h)Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
(i)Recognition of U.S. Special Resolutions Regimes.
(i)In the event that any Underwriter that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined below), the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement,
and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(ii)In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate (as defined below) of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
(iii)For purpose of this Section 15(i):
(1)the term “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k);
(2)the term “Covered Entity” means any of the following: (A) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (B) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (C) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b);
(3)the term “Default Rights” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and
(4)the term “U.S. Special Resolution Regime” means each of (A) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (B) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
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| Very truly yours, | |
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| F&G ANNUITIES & LIFE, INC. |
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| CF BERMUDA HOLDINGS LIMITED |
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| FGL US HOLDINGS INC. |
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| FIDELITY & GUARANTY LIFE BUSINESS SERVICES, INC. |
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{Signature Page to Underwriting Agreement}
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| FIDELITY & GUARANTY LIFE HOLDINGS, INC. |
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{Signature Page to Underwriting Agreement}
Each for itself and as Representatives of the several Underwriters listed in Schedule 1 hereto:
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| WELLS FARGO SECURITIES, LLC | |
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| BOFA SECURITIES, INC. | |
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| MORGAN STANLEY & CO. LLC | |
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| RBC CAPITAL MARKETS, LLC | |
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| UBS SECURITIES LLC | |
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{Signature Page to Underwriting Agreement}
{Signature Page to Underwriting Agreement}
Schedule 1
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Underwriter | | Principal Amount of the Initial Securities to be Purchased |
| Wells Fargo Securities, LLC | | | $[_______] | |
| BofA Securities, Inc. | | | [_______] | |
| Morgan Stanley & Co. LLC | | | [_______] | |
| RBC Capital Markets, LLC | | | [_______] | |
| UBS Securities LLC | | | [_______] | |
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Total | | | | $[_______] | |
Schedule 2
Guarantors
1. CF Bermuda Holdings Limited, a Bermuda exempted company
2. FGL US Holdings Inc., a Delaware corporation
3. Fidelity & Guaranty Life Business Services, Inc., a Delaware corporation
4. Fidelity & Guaranty Life Holdings, Inc., a Delaware corporation
Schedule 3
Significant Subsidiaries
1. CF Bermuda Holdings Limited, a Bermuda exempted company
2. F&G Life Re Ltd, a Bermuda exempted company
3. FGL US Holdings Inc., a Delaware corporation
4. Fidelity & Guaranty Life Holdings, Inc., a Delaware corporation
5. Fidelity & Guaranty Life Insurance Company, an Iowa corporation
Schedule 4
Significant Subsidiaries that are Insurance Subsidiaries
1. F&G Life Re Ltd, a Bermuda exempted company
2. Fidelity & Guaranty Life Insurance Company, an Iowa corporation
ANNEX A
Issuer Free Writing Prospectuses
Part A. Issuer General Use Free Writing Prospectuses (forming part of the Time of Sale Information):
1. Pricing Term Sheet dated [_____], 2023.
Part B. Issuer Limited Use Free Writing Prospectuses (not forming part of the Time of Sale Information):
1. The Company’s NetRoadshow Investor Presentation available on [_______], 2023 in the form previously provided by the Company to and approved by the Representatives.
ANNEX B
Filed under Rule 433
File No. 333-[______]
F&G Annuities & Life, Inc.
$[____] [____]% Senior Notes due 2053
Pricing Term Sheet
[________], 2023
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Issuer: | | F&G Annuities & Life, Inc. |
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| Guarantors: | | CF Bermuda Holdings Limited, FGL US Holdings Inc., Fidelity & Guaranty Life Business Services, Inc. and Fidelity & Guaranty Life Holdings, Inc. |
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| Security: | | [____]% Senior Notes due 2053 (the “Notes”) |
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| Ranking: | | Senior unsecured |
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| Format: | | SEC registered |
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| Expected Ratings*: | | (S&P / Fitch): ____ (____) / ____ (____) |
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| Trade Date: | | [_______], 2023 |
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| Settlement Date**: | | [_______], 2023 (T+[_]) |
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| Aggregate Principal Amount: | | $[____] |
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| Overallotment Option: | | Up to an additional $[____] for 30 days after the date hereof, solely to cover overallotments, if any |
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| Maturity Date: | | [_______], 2053 |
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| Coupon: | | [____]% |
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| Offering Price: | | $25 per Note |
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| Interest Payment Dates: | | Quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning March 15, 2024. |
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| Optional Redemption: | | On or after December 15, 2028, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date. |
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| Optional Redemption for Tax Reasons: | | In certain circumstances where additional amounts are due by a foreign guarantor, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest thereon to, but excluding, the redemption date. |
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| Interest Rate Adjustment: | | Interest rates payable on the Notes will be subject to adjustment from time to time if either S&P or Fitch (or a substitute rating agency therefor) downgrades (or downgrades and subsequently upgrades) the respective credit ratings assigned to the Notes. |
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| Change of Control Offer: | | If a Change of Control Triggering Event with respect to the Notes occurs, each holder of such Notes will have the right to require the Issuer to repurchase all or, at the holder’s option, any part of such holder’s Notes at a repurchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest thereon to, but excluding, the repurchase date. |
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| Denominations: | | $25 and integral multiples of $25 in excess thereof |
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| Expected Listing: | | New York Stock Exchange |
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| Gross Proceeds (before expenses and deduction of the underwriting discount) to the Issuer: | | $[_______] |
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| Underwriting Discount: | | $0.7875 per Note sold to retail investors (in the case of $[_______] aggregate principal amount of Notes sold to retail investors) and $0.50 per Note sold to institutional investors (in the case of $[_______] aggregated principal amount of Notes sold to institutional investors) |
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| Net Proceeds (before expenses) to the Issuer: | | $[_______] |
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| Joint Book-Running Managers: | | Wells Fargo Securities, LLC BofA Securities, Inc. Morgan Stanley & Co. LLC RBC Capital Markets, LLC UBS Securities LLC |
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| Joint Lead Managers: | | [_______] [_______] [_______] |
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| Co-Managers: | | [_______] [_______] |
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| CUSIP / ISIN: | | [_______] / [_______] |
*A securities rating is not a recommendation to buy, sell or hold securities and may be subject to review, revision, suspension, reduction or withdrawal at any time by the assigning rating agency. The rating of the Notes should be evaluated independently from ratings of other securities.
**It is expected that delivery of the Notes will be made on or about [_______], 2023, which will be the [____] business day (T+[_]) following the date hereof. Under Rule 15c6-1 under the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business days (T+2), unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more than two business days prior to the scheduled settlement date will be required, by virtue of the fact that the Notes will initially settle in T+[_], to specify an alternative settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the Notes who wish to trade the Notes more than two business days prior to the scheduled settlement date should consult their own advisors.
F&G Annuities & Life, Inc. has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (the “Commission”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents F&G Annuities & Life, Inc. has filed with the Commission for more complete information about F&G Annuities & Life, Inc. and this offering. You may get these documents for free by visiting EDGAR on the Commission’s website at www.sec.gov. Alternatively, F&G Annuities & Life, Inc., any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Wells Fargo Securities, LLC toll-free at 1-800-645-3751 or by emailing wfscustomerservice@wellsfargo.com, BofA Securities, Inc. toll-free at 1-800-294-1322, Morgan Stanley & Co. LLC toll-free at 1-866-718-1649, RBC Capital Markets, LLC toll-free at 1-866-375-6829 or UBS Securities LLC toll-free at 1-888-827-7275.
Any disclaimer or other notice that may appear below is not applicable to this communication and should be disregarded. Such disclaimer or notice was automatically generated as a result of this communication being sent by Bloomberg or another email system.
ANNEX C
{Form of Opinion of Company General Counsel}
(1)The Company, each of FGL US Holdings Inc. (“FGL US Holdings”), Fidelity & Guaranty Life Business Services, Inc. (“FGLBS”), Fidelity & Guaranty Life Holdings, Inc. (“FGLH” and, collectively with FGL US Holdings and FGLH, the “Delaware Guarantors”) and each of F&G Life Re Ltd and Fidelity & Guaranty Life Insurance Company have been duly organized, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.
(2)All the outstanding shares of capital stock of each Delaware Guarantor and each of F&G Life Re Ltd and Fidelity & Guaranty Life Insurance Company have been duly authorized and validly issued and are fully paid and non-assessable, and, except as otherwise set forth in the Registration Statement, the Time of Sale Information and the Prospectus, all outstanding shares of capital stock of the Delaware Guarantors and each of F&G Life Re Ltd and Fidelity & Guaranty Life Insurance Company are owned by the Company, either directly or through wholly owned subsidiaries, free and clear of any security interest, claim, lien or encumbrance, other than any security interest, claim, lien or encumbrance which would not have a Material Adverse Effect.
(3)To the knowledge of such counsel, except as described in each of the Registration Statement, the Time of Sale Information and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company, any of the Delaware Guarantors or either of F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company is or may be a party or to which any property, right or asset of the Company, any of the Delaware Guarantors or either of F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company is or may be the subject which, individually or in the aggregate, if determined adversely to the Company, any of the Delaware Guarantors or either of F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company, would reasonably be likely to have a Material Adverse Effect; and no such investigations, actions, suits or proceedings are threatened or, to the knowledge of such counsel, contemplated by any governmental or regulatory authority or threatened by others which, individually or in the aggregate, if determined adversely to the Company, any of the Delaware Guarantors or either of F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company, would reasonably be likely to have a Material Adverse Effect.
(4)The execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which it is a party, the issuance and sale of the Securities, the issuance of the Guarantees and compliance by the Company and the Guarantors with the terms of the Transaction Documents to which each is a party and the
consummation of the transactions contemplated by the Transaction Documents will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property, right or asset of the Company, any of the Delaware Guarantors or either of F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which, to the knowledge of such counsel, the Company, any of the Delaware Guarantors or either of F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company is a party or by which, to the knowledge of such counsel, the Company, such Delaware Guarantor or either F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company is bound or to which, to the knowledge of such counsel, any property, right or asset of the Company, such Delaware Guarantor or either F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company is subject, (ii) result in any violation of the provisions of the charter or bylaws or similar organizational documents of the Company, any of the Delaware Guarantors or either of F&G Life Re Ltd or Fidelity & Guaranty Life Insurance Company or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.
(5)Except as described in the Registration Statement, the Time of Sale Information and the Prospectus, the Company and each Insurance Subsidiary is duly licensed as an insurance holding company or as an insurer or reinsurer, as the case may be, under the Insurance Laws of each jurisdiction in which the conduct of its business as described in the Registration Statement, the Time of Sale Information and the Prospectus requires such licensing, except where such failure of the Company and the Insurance Subsidiaries to be so licensed would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; the Company and the Insurance Subsidiaries have made all required filings and fulfilled and performed all obligations under applicable holding company statutes or other Insurance Laws in each jurisdiction where such filings and obligations are required, except where such failure to make such filings or fulfill or perform such obligations would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; and except as described in the Registration Statement, the Time of Sale Information and the Prospectus, the Company and the Insurance Subsidiaries have all other necessary authorizations, approvals, orders, consents, certificates, permits, registrations and qualifications of and from all insurance regulatory authorities necessary to conduct their respective businesses as described in the Registration Statement, the Time of Sale Information and the Prospectus and all of the foregoing are in full force and effect, except where the failure to have such authorizations, approvals, orders, consents, certificates, permits, registrations or qualifications or their failure to be in full force and effect would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. Except as described in the Registration Statement, the Time of Sale Information and the Prospectus, there is no pending or, to the knowledge of such counsel, threatened, action, suit,
proceeding or investigation from insurance regulatory authorities that would be reasonably likely to result in the revocation, termination or suspension of any licenses, authorizations, approvals, orders, consents, certificates, permits, registrations and qualifications required under the Insurance Laws, except where the failure to have such authorizations, approvals, orders, consents, certificates, permits, registrations or qualifications or their failure to be in full force and effect would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; to the knowledge of such counsel, none of the Company or any of the Insurance Subsidiaries has received any notification from any insurance regulatory authority to the effect that any additional authorization, approval, order, consent, certificate, permit, registration or qualification is needed to be obtained by either the Company or any of the Insurance Subsidiaries to conduct their respective business as described in the Registration Statement, the Time of Sale Information and the Prospectus; and to the knowledge of such counsel, no insurance regulatory authority has commenced any proceeding for the issuance of any order or decree impairing, restricting or prohibiting the payment of dividends by the Company or any of the Insurance Subsidiaries.
(6)The Broker-Dealer Subsidiary is a duly registered broker-dealer under the Exchange Act, and in all jurisdictions where such registration, licensing or qualification is so required, except where the failure to be so registered, licensed or qualified would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. No subsidiary of the Company other than the Broker-Dealer Subsidiary is required to be registered or licensed as a broker-dealer under the Exchange Act or any other applicable law, rule or regulation, except where the failure to be so registered or licensed would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. The Broker-Dealer Subsidiary is a member of FINRA, and such other organizations in which its membership is required in order to conduct its business as now conducted, except as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. The information contained in the Form BD filed by the Broker-Dealer Subsidiary was true and complete in all material respects at the time of filing and such Broker-Dealer Subsidiary has made all amendments to such form as it is required to make under any applicable law, except as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. Neither the Broker-Dealer Subsidiary nor any “associated person” (within the meaning of the Exchange Act) thereof is ineligible or disqualified pursuant to Section 15(b) of the Exchange Act to act as a broker-dealer or as an associated person of a registered broker-dealer. There is no action pending or, to such counsel’s knowledge, threatened or contemplated, that would be reasonably likely to result in the Broker-Dealer Subsidiary or any “associated person” (as defined in the Exchange Act or FINRA rules) thereof becoming ineligible to act in such capacity.
THIRD SUPPLEMENTAL INDENTURE
among
F&G Annuities & Life, Inc.,
the Guarantors party hereto as of the date hereof and any other Guarantor that becomes party to the Original Indenture referred to below pursuant to Section 3.12 thereof
and
Citibank, N.A., as Trustee
Dated as of [_______], 2023
[____]% Senior Notes due 2053
(Supplement to the Original Indenture, dated as of January 13, 2023)
This Third Supplemental Indenture, dated as of [______], 2023 (this “Supplemental Indenture”), is entered into by and among F&G Annuities & Life, Inc., a Delaware corporation (the “Company”), the Guarantors (as defined in the Original Indenture (as defined below)) party hereto as of the date hereof and any other Guarantor that becomes party to the Original Indenture pursuant to Section 3.12 of the Original Indenture and Citibank, N.A., as trustee (the “Trustee”).
RECITALS:
WHEREAS, the Company, the Guarantors and the Trustee are parties to the Indenture, dated as of January 13, 2023 (the “Base Indenture”), which provides for the issuance from time to time of the Company’s unsecured notes or other evidences of indebtedness (the “Securities”) in one or more series and to be fully and unconditionally guaranteed on a senior unsecured basis by the Guarantors, in each case as provided therein;
WHEREAS, Section 3.12 of the Base Indenture provides that if, after the date of the Base Indenture, any Subsidiary (as defined in the Base Indenture) guarantees (or becomes a co-borrower or co-issuer in respect of) the Company’s obligations under the Credit Agreement (as defined in the Base Indenture), then, within 15 days of the occurrence of such event, the Company shall cause such Subsidiary to become a Guarantor under the Base Indenture by causing such Subsidiary to execute and deliver to the Trustee a supplemental indenture, pursuant to which such Subsidiary shall fully and unconditionally guarantee on a senior unsecured basis all of the Company’s obligations under the Securities and the Base Indenture;
WHEREAS, pursuant to the Second Supplemental Indenture, dated as of January 26, 2023, between CF Bermuda Holdings Limited, a Bermuda exempted company (“CF Bermuda”), and the Trustee, CF Bermuda provided such full and unconditional guarantee and became a “Guarantor” under, and a party to, the Base Indenture (the Base Indenture, as supplemented by the Second Supplemental Indenture, the “Original Indenture”);
WHEREAS, Section 8.1 of the Original Indenture permits the Company, the Guarantors and the Trustee to enter into an indenture supplemental to the Original Indenture to establish the terms of Securities of any series and the form of Security Certificates representing such Securities without notice to or consent of any Holder of any Securities;
WHEREAS, Section 2.1(a) of the Original Indenture permits the form of the Security Certificates representing Securities of any series to be established pursuant to an indenture supplemental to the Original Indenture; and
WHEREAS, pursuant to Sections 2.1(a), 2.3 and 2.4(a) of the Original Indenture, the Company desires to provide for the establishment of a new series of Securities under the Original Indenture to be fully and unconditionally guaranteed on a senior unsecured basis by the Guarantors, the form and substance of such series of Securities and the Guarantees and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Supplemental Indenture. All conditions and actions necessary to make this Supplemental Indenture, when executed and delivered, a valid agreement of each of the Company and each Guarantor, in accordance with its terms, have been satisfied or performed.
NOW, THEREFORE, in consideration of the premises and the purchase of the Securities established by this Supplemental Indenture by the Holders thereof, the Company, the Guarantors and the Trustee mutually covenant and agree, for the equal and proportionate benefit of all such Holders, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Relation to Original Indenture. This Supplemental Indenture constitutes a part of the Original Indenture (the provisions of which, as modified through this Supplemental Indenture, shall apply to the
series of Securities established by this Supplemental Indenture) but, except as expressly provided herein, shall not modify, amend or otherwise affect the Original Indenture insofar as it relates to any other series of Securities or, except as expressly provided herein, modify, amend or otherwise affect in any manner the terms and conditions of the Securities of any other series.
Section 1.2 Definitions. For all purposes of this Supplemental Indenture, the capitalized terms used herein (i) which are defined in Section 1.2(c) have the meanings assigned to such terms therein and (ii) which are defined in the Original Indenture (and which are not defined in Section 1.2(c)) have the meanings assigned to such terms in the Original Indenture. For purposes of this Supplemental Indenture:
(a) Unless the context otherwise requires, any reference to a Section refers to a Section of this Supplemental Indenture;
(b) The words “herein,” “hereof” and “hereunder” and words of similar import refer to this Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision hereof; and
(c) The terms defined in this Section 1.2(c) include the plural as well as the singular.
“Base Indenture” has the meaning set forth in the Recitals hereto.
“Below Investment Grade Rating Event” with respect to the Notes means that the respective ratings of the Notes are downgraded from an Investment Grade Rating by each of the Rating Agencies to below an Investment Grade Rating by each of the Rating Agencies on any date during the period commencing upon the first public notice of the occurrence of a Change of Control or the Company’s intention to effect a Change of Control and ending 60 days following public notice of the occurrence of the related Change of Control (which 60-day period shall be extended so long as the respective ratings of the Notes are under publicly announced consideration for possible downgrade by either of the Rating Agencies); provided, that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in ratings shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of “Change of Control Triggering Event” set forth in this Section 1.2) if the Rating Agencies making the reduction in ratings to which this definition would otherwise apply do not announce or publicly confirm or inform the Holders in writing at their request that the reduction was the result, in whole or in part, of any event or circumstance comprising or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).
“Change of Control” means the occurrence of any of the following:
(i)the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its subsidiaries taken as a whole to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”) other than to one or more Permitted Holders, the Company or one of its subsidiaries;
(ii)the approval by the holders of the Company’s common stock of any plan or proposal for the liquidation or dissolution of the Company; or
(iii)the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any Person or Group, other than a Permitted Holder, becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s Voting Stock.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Company becomes a direct or indirect wholly owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are
substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (B) immediately following that transaction, no Person or Group (other than a Permitted Holder or a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly of more than 50% of the Voting Stock of such holding company.
“Change of Control Offer” has the meaning set forth in Section 2.4(a).
“Change of Control Payment” has the meaning set forth in Section 2.4(a).
“Change of Control Payment Date” has the meaning set forth in Section 2.4(a).
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event in respect of such Change of Control.
“Company” means the Person named as the “Company” in the first paragraph of this Supplemental Indenture until a successor Person shall have become such pursuant to the applicable provisions of the Original Indenture, and thereafter “Company” shall mean such successor Person.
“Depositary” has the meaning set forth in Section 2.1(b).
“DTC” means The Depository Trust Company (and any successor thereto).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fitch” means Fitch Ratings, Inc. and its successors.
“Foreign Guarantor” means any Guarantor that is organized or existing under the laws of, or otherwise treated as resident for tax purposes in, a jurisdiction other than the United States, any state thereof or the District of Columbia.
“Group” has the meaning set forth in the definition of “Change of Control” herein.
“Interest Payment Date” has the meaning set forth in Section 2.1(d).
“Investment Grade Rating” means a rating equal to or higher than BBB- (or the equivalent) by S&P and Fitch, respectively, or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Company.
“Maturity Date” has the meaning set forth in Section 2.1(c).
“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.
“Notes” has the meaning set forth in Section 2.1(a).
“Original Indenture” has the meaning set forth in the Recitals hereto.
“Par Call Date” means [______], 2028.
“Permitted Holder” means any or a combination of any of:
(i)Fidelity National Financial, Inc. (or its successor);
(ii)any affiliate or related party of any Person specified in clause (i) of this definition; and
(iii)any Person both the capital stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) are owned 50% or more by Persons specified in clauses (i) and (ii) of this definition or any Group in which the Persons specified in clauses (i) and (ii) of this definition own more than a majority of the voting power of the Voting Stock held by such Group, and any Person that is a member of any such Group.
“Rating Agencies” means (i) each of S&P and Fitch and their respective successors; and (ii) if either of S&P or Fitch ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act, that the Company selects (as certified by an Officer of the Company to the Trustee) as a replacement agency for S&P or Fitch, respectively, as the case may be.
“Redemption Date,” when used with respect to any Note to be redeemed pursuant to Section 2.3(b) hereof, means the date fixed for such redemption pursuant to this Supplemental Indenture.
“Redemption Price,” when used with respect to any Note to be redeemed, means the price at which it is to be redeemed pursuant to this Supplemental Indenture.
“Regular Record Date” has the meaning set forth in Section 2.1(e).
“S&P” means S&P Global Ratings Services (a division of S&P Global Inc.) and its successors.
“Securities” has the meaning set forth in the Recitals hereto.
“Substitute Rating Agency” means Moody’s, as selected by the Company in its discretion at any time and from time to time as a replacement agency for S&P or Fitch, respectively, as the case may be, as certified to the Trustee by a resolution of the Board of Directors.
“Supplemental Indenture” has the meaning set forth in the first paragraph of this Supplemental Indenture.
“Tax Jurisdiction” means any jurisdiction in which any Foreign Guarantor is then incorporated, organized, engaged in business or resident for tax purposes, any political subdivision or governmental authority thereof or therein having power to tax or any jurisdiction from or through which payment under or with respect to the Securities or the Guarantees is made, excluding the United States and any political subdivision thereof.
“Tax Redemption Date” has the meaning set forth in Section 2.3(c).
“Trustee” means the Person named as the “Trustee” in the first paragraph of this Supplemental Indenture until a successor Trustee shall have assumed such role pursuant to the applicable provisions of the Original Indenture, and thereafter “Trustee” shall mean such successor Trustee.
“Voting Stock” of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote generally in the election of the board of directors of such Person.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Terms of Notes. Pursuant to Sections 2.1(a) and 2.3(b) of the Original Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Securities shall be known and designated as the “[___]% Senior Notes due 2053” (the “Notes”) of the Company.
(b) Form and Denominations. The Notes will be issued only in fully registered form without coupons in minimum denominations of $25 and integral multiples of $25 in excess thereof. The Notes will initially be issued in the form of one or more Global Certificates substantially in the form set forth in Annex A hereto, with such modifications thereto as may be approved by the Officer executing the same, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee as custodian for DTC (the “Depositary”) and registered in the name of Cede & Co., the Depositary’s nominee, duly executed by the Company, and, upon receipt of a written order of the Company and other documents required under the Original Indenture, authenticated by the Trustee. In limited circumstances, the Notes may be represented by Definitive Certificates. The Notes will be denominated in Dollars and payments of principal and interest will be made in Dollars.
(c) Maturity Date. The principal amount of, and all accrued and unpaid interest on, the Notes shall be payable in full on December 15, 2053, or if such day is not a Business Day, the following Business Day (the “Maturity Date”).
(d) Interest. Subject to Section 2.2, the Notes will bear interest at a rate of [____]% per year. Interest on the Notes will accrue from and including [ ________], 2023 (or the most recent Interest Payment Date to which interest on the Notes has been paid or made available for payment) and will be payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning on March 15, 2024 (each such date, an “Interest Payment Date”), and at the Maturity Date. Each interest payment due on an Interest Payment Date or the Maturity Date will include interest accrued from and including the most recent Interest Payment Date to which interest on the Notes has been paid or made available for payment (or, if no interest has been paid, [________], 2023) to, but excluding, the next Interest Payment Date or the Maturity Date or any Redemption Date or Tax Redemption Date, as the case may be. Interest on the Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months. If any Interest Payment Date falls on a date that is not a Business Day, such payment of interest (or principal in the case of the Maturity Date) will be postponed until the next succeeding Business Day, but no interest or other amount will be paid as a result of any such postponement, and such payment will have the same force and effect as if made on the scheduled Interest Payment Date. For purposes of the Notes, the Original Indenture and this Supplemental Indenture, the term “interest” shall be deemed to include interest provided for in the first sentence of this Section 2.1(d) and in Section 2.2.
(e) To Whom Interest Is Payable. Interest on each Interest Payment Date shall be payable to the Person in whose name the Notes are registered at the close of business on the regular record date for such Interest Payment Date, which regular record date shall be the March 1, June 1, September 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each, a “Regular Record Date”); provided, however, that interest due on the Maturity Date or any Redemption Date or Tax Redemption Date (in each case, whether or not an Interest Payment Date) will be paid to the Person to whom principal of such Notes is payable (subject to the rights of Holders on the relevant Regular Record Date to receive interest due on any Interest Payment Date preceding the Maturity Date, Redemption Date or Tax Redemption Date).
(f) Sinking Fund; Holder Repurchase Right. The Notes shall not be subject to any sinking fund or analogous provision or be redeemable at the option of the Holders.
Section 2.2 Interest Rate Adjustment. The interest rate payable on the Notes will be subject to adjustment from time to time if either S&P or Fitch or, in either case, any Substitute Rating Agency downgrades (or downgrades and subsequently upgrades) the credit ratings assigned to the Notes, in the manner described in this Section 2.2.
(a) If the rating assigned by S&P (or any Substitute Rating Agency therefor) of the Notes is downgraded to a rating set forth in the immediately following table, the interest rate on the Notes will increase from the interest rate payable thereon on the date of their initial issuance by an amount equal to the percentage set forth
opposite the rating in the table below (plus, if applicable, the percentage set forth opposite the rating in the table following the succeeding paragraph):
| | | | | | | | | | | |
| S&P Rating(1) | Percentage | |
| | | |
| BB+ | 0.25% | |
| BB | 0.50% | |
| BB- | 0.75% | |
| B+ or below | 1.00% | |
(1) Including the equivalent ratings of any Substitute Rating Agency therefor.
(b) If the rating assigned by Fitch (or any Substitute Rating Agency therefor) of the Notes is downgraded to a rating set forth in the immediately following table, the interest rate on the Notes will increase from the interest rate payable thereon on the date of their initial issuance by an amount equal to the percentage set forth opposite the rating in the table below (plus, if applicable, the percentage set forth opposite the rating in the table following the preceding paragraph):
| | | | | | | | | | | |
| Fitch Rating(1) | Percentage | |
| | | |
| BB+ | 0.25% | |
| BB | 0.50% | |
| BB- | 0.75% | |
| B+ or below | 1.00% | |
(1) Including the equivalent ratings of any Substitute Rating Agency therefor.
(c) If at any time the interest rate on the Notes has been increased and S&P or Fitch (or, in either case, any Substitute Rating Agency) subsequently upgrades its rating of the Notes to any of the ratings set forth in the tables in Sections 2.2(a) and 2.2(b), the interest rate on the Notes will be decreased such that the interest rate on the Notes equals the interest rate payable on the Notes on the date of their initial issuance plus the percentages set forth opposite the ratings set forth in the tables in Sections 2.2(a) and 2.2(b) in effect immediately following the upgrade in rating. If S&P and Fitch (or, in either case, any Substitute Rating Agency) subsequently upgrade their respective ratings of the Notes to BBB- (or its equivalent, in the case of any Substitute Rating Agency) or higher, the interest rate on the Notes will be decreased to the interest rate payable thereon on the date of their initial issuance (and if one such upgrade occurs and the other does not, the interest rate on the Notes will be decreased so that it does not reflect any increase of interest rate attributable to the upgrading rating agency). In addition, the interest rate payable on the Notes will permanently cease to be subject to any adjustment described in Section 2.2(a) or 2.2(b) (notwithstanding any subsequent downgrade in the ratings by either or both rating agencies) if the Notes become rated BBB+ (or the equivalent thereof, in the case of any Substitute Rating Agency) or higher by each of S&P and Fitch (or, in either case, a Substitute Rating Agency) (or by one rating agency if the Notes are only rated by one rating agency and the Company has not obtained a rating on the Notes from a Substitute Rating Agency).
(d) Each adjustment required by any downgrade or upgrade in a rating set forth in this Section 2.2, whether occasioned by the action of S&P or Fitch (or, in either case, any Substitute Rating Agency), will be made independent of any and all other adjustments; provided, however, that in no event shall (i) the interest rate on the Notes be reduced to below the interest rate payable thereon on the date of their initial issuance or (ii) the total increase in the interest rate on the Notes exceed 2.00% above the interest rate payable thereon on the date of their initial issuance.
(e) No adjustments to the interest rate on the Notes will be made solely as a result of a rating agency ceasing to provide a rating of the Notes. If at any time S&P or Fitch ceases to provide a rating of the Notes for any reason, the Company will use its commercially reasonable efforts to obtain a rating of the Notes from a Substitute
Rating Agency, if one exists, in which case, for purposes of determining any increase or decrease in the interest rate on the Notes pursuant to the tables in Sections 2.2(a) and 2.2(b), (i) such Substitute Rating Agency will be substituted for the last rating agency to provide a rating of the Notes but which has since ceased to provide such rating, (ii) the relative rating scale used by such Substitute Rating Agency to assign ratings to senior unsecured debt will be determined in good faith by an independent investment banking institution of national standing appointed by the Company at its sole expense and, for purposes of determining the applicable ratings included in the applicable table in Section 2.2(a) or 2.2(b) with respect to such Substitute Rating Agency, such ratings will be deemed to be the equivalent ratings used by S&P or Fitch, as applicable, in such table and (iii) the interest rate on the Notes will increase or decrease, as the case may be, such that the interest rate on the Notes equals the interest rate payable on the Notes on the date of their initial issuance plus the appropriate percentage, if any, set forth opposite the deemed equivalent rating from such Substitute Rating Agency in the applicable table in Section 2.2(a) or 2.2(b) (taking into account the provisions of clause (ii) of this Section 2.2(e)) (plus any applicable percentage resulting from a decreased rating by the other rating agency).
(f) For so long as only one of S&P or Fitch provides a rating of the Notes and the Company does not select a Substitute Rating Agency to replace the other rating agency, any subsequent increase or decrease in the interest rate on the Notes necessitated by a downgrade or upgrade in the applicable rating by the rating agency providing the rating shall be twice the applicable percentage set forth in the applicable table in Section 2.2(a) or 2.2(b) (taking into account the provisions of clause (ii) of Section 2.2(e), if applicable). For so long as none of S&P, Fitch or a Substitute Rating Agency provides a rating of the Notes, the interest rate on the Notes will increase to, or remain at, as the case may be, 2.00% above the interest rate payable on the Notes on the date of their initial issuance.
(g) Any interest rate increase or decrease on the Notes described in this Section 2.2 will take effect on the next Business Day following the date on which a rating change occurs that requires an adjustment in the interest rate on the Notes.
(h) If the interest rate payable on the Notes is increased as described in this Section 2.2, the term “interest,” as used with respect to the Notes, will be deemed to include any such additional interest, unless the context otherwise requires.
(i) The Company shall promptly notify the Trustee upon becoming aware of any decrease in the rating assigned to the Notes by either S&P or Fitch (or any Substitute Rating Agency therefor). The Trustee shall not be responsible for and makes no representation as to any act or omission of any rating agency or any rating with respect to the Notes or the selection of a Substitute Rating Agency. The Trustee shall have no obligation to independently determine or verify if an event has occurred or notify the Holders of any event dependent upon the rating of the Notes, or if the rating on the Notes has been changed, suspended or withdrawn by any rating agency.
Section 2.3 Optional Redemption.
(a) The provisions of Article XIII of the Original Indenture shall apply to the Notes.
(b) On or after the Par Call Date, the Company may redeem the Notes as its option, in whole or in part, at any time and from time to time, at a Redemption Price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.
(c) The Company may redeem the Notes at its option, in whole but not in part, at a Redemption Price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding, the date fixed by the Company for such redemption (such date, a “Tax Redemption Date”) and all Additional Amounts, if any, then due and that will become due on the Tax Redemption Date as a result of such redemption or otherwise, if on the next date on which any amount would be payable in respect of the Guarantees, (i) the relevant Foreign Guarantor is or would be required to pay Additional Amounts, (ii) the payment giving rise to such requirement cannot be made by the Company or another Guarantor without the obligation to pay Additional Amounts and (iii)
the relevant Foreign Guarantor cannot avoid any such payment obligation by taking reasonable measures available as a result of:
(1)any change in, or amendment to, the laws (or any regulations, protocols or rulings promulgated thereunder) of the relevant Tax Jurisdiction affecting taxation which change or amendment has not been publicly announced before and which becomes effective on or after [INSERT DATE OF PRICING], 2023 (or, if the relevant Tax Jurisdiction was not a Tax Jurisdiction on the date of the initial issuance of the Notes, the date on which such Tax Jurisdiction became a Tax Jurisdiction under this Supplemental Indenture); or
(2)any change in, or amendment to, the existing official written position or the introduction of a written official position regarding the application, administration or interpretation of such laws, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction or a change in published administrative practice), which change, amendment, application or interpretation has not been publicly announced and becomes effective on or after [INSERT DATE OF PRICING], 2023 (or, if the relevant Tax Jurisdiction was not a Tax Jurisdiction on the date of the initial issuance of the Notes, the date on which such Tax Jurisdiction became a Tax Jurisdiction under this Supplemental Indenture).
Notice of any redemption described in this Section 2.3(c) will be provided to each Holder of the Notes to be redeemed in accordance with Sections 2.3(e) and 2.3(f) hereof, provided, that the Company will not give any such notice of redemption earlier than 30 days prior to the earliest date on which the relevant Foreign Guarantor would be obligated to make such payment or withholding if a payment under or in respect of the Notes or the Guarantees were then due, and unless at the time such notice is given, the obligation to pay Additional Amounts remains in effect.
Prior to the furnishing of any notice of redemption pursuant to the immediately preceding paragraph, the Company will deliver the Trustee an Opinion of Counsel to the effect that there has been such change or amendment described in paragraphs (1) and/or (2) of this Section 2.3(c) which would entitle the Company to redeem the Notes. In addition, before the Company furnishes the notice of redemption to each Holder of the Notes to be redeemed pursuant to the immediately preceding paragraph, it will deliver to the Trustee an Officer’s Certificate to the effect that the obligation to pay Additional Amounts cannot be avoided by the relevant Foreign Guarantor (but only if the payment giving rise to such requirement cannot be made by the Company or another Guarantor without the obligation to pay Additional Amounts) taking reasonable measures available to it.
The Trustee will accept such Officer’s Certificate and Opinion of Counsel as sufficient evidence of the existence and satisfaction of the conditions precedent as described in this Section 2.3(c), in which event it will be conclusive and binding on the Holders.
(d) Notwithstanding Sections 2.3(b) and 2.3(c) hereof, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date or a Tax Redemption Date, as applicable, will be payable on the Interest Payment Date to the Holders as of the close of business on the Regular Record Date.
(e) Notice of any redemption (which may be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction that is pending (such as an equity or equity-linked offering, an incurrence of indebtedness or an acquisition or other strategic transaction involving a change of control in the Company)) shall be given not less than 15 days and not more than 60 days prior to the Redemption Date or the Tax Redemption Date, as applicable, to each Holder of the Notes to be redeemed. Any notice delivered pursuant to this Section 2.3(e) shall either be mailed to the registered address of each Holder of the Notes or provided by electronic mail or facsimile, or by such other notice method permitted by the Original Indenture, to the Trustee for transmission to the Depositary or its nominee. If the redemption or notice of redemption is subject to satisfaction of one or more conditions precedent, the notice of redemption shall state that, in the Company’s discretion, the Redemption Date or the Tax Redemption Date, as applicable, may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Company in its sole discretion), or such redemption may not occur
and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Company in its sole discretion) by the Redemption Date or the Tax Redemption Date, as applicable, or by the Redemption Date or the Tax Redemption Date, as applicable, so delayed.
(f) The notice of redemption with respect to any redemption pursuant to Article XIII of the Original Indenture need not set forth the Redemption Price, if such Redemption Price is not ascertainable, but only the manner of calculation thereof, as described above.
(g) The Company shall be responsible for making calculations called for under the Notes, including, but not limited to, determination of the Redemption Price, premium, if any, and any Additional Amounts or other amounts payable on the Notes. The Company will provide its calculations to the Trustee, and, absent manifest error, the Trustee is entitled to rely conclusively on the accuracy of the Company’s calculations without independent verification. The Trustee shall have no liability for any calculation or any information used in any calculation. The Company’s actions and determinations in determining the Redemption Price shall be conclusive and binding for all purposes, absent manifest error.
(h) Unless the Company defaults in payment of the Redemption Price and accrued and unpaid interest, on and after the Redemption Date or the Tax Redemption Date, as applicable, interest will cease to accrue on the Notes or portions thereof called for redemption and all rights under the Notes will terminate. No later than 9:00 a.m., New York time, on the Redemption Date or the Tax Redemption Date, as applicable, the Company is required to deposit with a Paying Agent or the Trustee (or, if the Company or any Guarantor is acting as Paying Agent, set aside, segregate and hold in trust as provided in Section 3.4 of the Original Indenture) an amount of money sufficient to pay the Redemption Price of and accrued and unpaid interest on the Notes to be redeemed on such Redemption Date or such Tax Redemption Date, as applicable. If the Company is redeeming less than all the Notes, the Notes to be redeemed shall be selected by lot by DTC, in the case of Notes represented by a Global Certificate, or by the Trustee by a method the Trustee deems to be fair and appropriate, in the case of the Notes that are not represented by a Global Certificate. The Trustee shall not be liable for selection made by it under this Section 2.3(h). The Notes may be redeemed in part in multiples equal to not less than $25 and integral multiples of $25 in excess thereof. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed.
Section 2.4 Repurchase upon Change of Control Triggering Event.
(a) If a Change of Control Triggering Event with respect to the Notes occurs, unless the Company has exercised its right pursuant to Section 2.3 to redeem the Notes, the Company shall be required to make an offer to repurchase all or, at the Holder’s option, any part (equal to $25 or an integral multiple of $25 in excess thereof) of such Holder’s Notes (a “Change of Control Offer”) for a payment in cash equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest thereon (the “Change of Control Payment”) to, but excluding, the repurchase date (the “Change of Control Payment Date”).
(b) Within 30 days following the date of any Change of Control Triggering Event with respect to the Notes or, at the Company’s option, prior to any Change of Control with respect to the Notes but after the public announcement of the transaction or transactions that constitutes or may constitute a Change of Control with respect to the Notes, the Company will mail a notice to each Holder (with a copy to the Trustee) describing the transaction or transactions that constitute or will constitute such Change of Control Triggering Event and offering to repurchase the Notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Original Indenture and described in such notice. The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to repurchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date.
(c) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Triggering Event. To the extent that the
provisions of any securities laws or regulations conflict with this Section 2.4, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 2.4 by virtue of such compliance.
(d) On the Change of Control Payment Date, the Company shall, to the extent lawful:
(i)accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;
(ii)deposit with the Paying Agent (or, if the Company or any Guarantor is acting as Paying Agent, set aside, segregate and hold in trust as provided in Section 3.4 of the Original Indenture) an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and
(iii)deliver or cause to be delivered to the Trustee the Notes properly accepted, together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased by the Company.
(e) The Paying Agent will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each such Holder a new Security equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each such new Security will be in a principal amount of $25 or an integral multiple of $25 in excess thereof.
(f) The Company will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all Notes properly tendered and not withdrawn under its offer. In the event that such third party terminates or defaults on its offer, the Company will be required to make a Change of Control Offer, treating the date of such termination or default as though it were the date of the Change of Control Triggering Event. In addition, the Company will not purchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default, other than a default in the payment of the Change of Control Payment.
Section 2.5 Additional Amounts. All payments made by or on behalf of a Foreign Guarantor under or with respect to the Notes or its Guarantee will be made free and clear of, and without withholding or deduction for, or on account of, any present or future taxes, unless the withholding or deduction of such taxes is then required by law. If any withholding or deduction for, or on account of, any taxes imposed or levied by or on behalf of any Tax Jurisdiction will at any time be required to be made from any payments made by or on behalf of any Foreign Guarantor with respect to any Guarantee, including, without limitation, payments of principal, premium, or interest, the Foreign Guarantor will pay Additional Amounts as may be necessary in order that the net amounts received in respect of such payments (including Additional Amounts) after such withholding or deduction will equal the respective amounts that would have been received in respect of such payments in the absence of such withholding or deduction; provided, however, that no Additional Amounts will be payable with respect to:
(a) any taxes that would not have been imposed but for the Holder or beneficial owner of the Notes being a citizen, resident or national of, or incorporated in or carrying on a business in, the relevant Tax Jurisdiction in which such taxes are imposed, or having any other present or former connection with the relevant Tax Jurisdiction in which such taxes are imposed, other than by the mere acquisition or holding of any Note or the enforcement or receipt of payment under or in respect of any Note or any Guarantee;
(b) any taxes imposed or withheld as a result of the failure of the Holder or beneficial owner of the Notes to comply with any reasonable written request made to such Holder in writing at least 30 days before any such withholding or deduction would be payable by any Foreign Guarantors to provide timely or accurate information concerning the nationality, residence or identity of such Holder or to make any valid or timely declaration or similar
claim or satisfy any certification, information or other reporting requirements (to the extent such Holder or beneficial owner is legally eligible to do so), which is required or imposed by a statute, treaty, regulation or administrative practice of the relevant Tax Jurisdiction as a precondition to exemption from, or reduction in the rate of withholding or deduction of, such taxes;
(c) any taxes that are imposed or withheld as a result of the presentation of any Note for payment (where presentation is required under the Original Indenture) more than 30 days after the relevant payment is first made available for payment to the Holder (except to the extent that the Holder would have been entitled to Additional Amounts had the Note been presented on the last day of such 30 day period);
(d) any estate, inheritance, gift, sale, transfer, use, personal property tax or similar tax or assessment;
(e) any tax which is payable otherwise than by withholding or deduction from payments made under or with respect to the Notes or any Guarantee;
(f) any tax that was imposed with respect to any payment on a Note to any Holder who is a fiduciary partnership, limited liability company or any person other than the sole beneficial owner of such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or limited liability company or the beneficial owner of such payment would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual Holder of such Note;
(g) any taxes that are imposed or withheld pursuant to Sections 1471 through 1474 of the Code as of the date of the initial issuance of the Notes (or any amended or successor version of such sections), any regulations promulgated thereunder, any official interpretations thereof, any similar law or regulation adopted pursuant to an intergovernmental agreement between a non-U.S. jurisdiction and the United States with respect to the foregoing or any agreements entered into pursuant to Section 1471(b)(1) of the Code; or
(h) any combination of items (a) through (g) above.
In addition to the foregoing, any Foreign Guarantor will pay and indemnify the Holder for any present or future stamp, issue, registration, transfer, court or documentary taxes, or any other excise or property taxes, charges or similar levies or taxes levied by any jurisdiction on the execution, delivery, registration or enforcement of any of the Notes, any Guarantee (other than on or in connection with a transfer of the Notes other than the initial sale thereof by the initial purchasers in connection with the initial issuance thereof) or any other document or instrument referred to therein, or the receipt of any payments with respect thereto.
If any Foreign Guarantor becomes aware that it will be obligated to pay Additional Amounts with respect to any payment under or with respect to the Notes or its Guarantee, the relevant Foreign Guarantor will deliver to the Trustee on a date at least 30 days prior to the date of such payment (unless the obligation to pay Additional Amounts arises after the 30th day prior to the date of such payment, in which case the relevant Foreign Guarantor shall notify the Trustee promptly in writing thereafter) an Officer’s Certificate stating the fact that Additional Amounts will be payable and the amount estimated to be so payable. The Officer’s Certificate must also set forth any other information reasonably necessary to enable the Paying Agent to pay Additional Amounts on the relevant payment date. The Trustee shall be entitled to rely solely on such Officer’s Certificate as conclusive proof that such payments are necessary. The relevant Foreign Guarantor will provide the Trustee with documentation reasonably satisfactory to the Trustee evidencing the payment of Additional Amounts.
The relevant Foreign Guarantor will make all withholdings and deductions required by law and will remit the full amount deducted or withheld to the relevant tax authority in accordance with applicable law. The relevant Foreign Guarantor will use its reasonable efforts to obtain tax receipts from each tax authority evidencing the payment of any taxes so withheld or deducted. The relevant Foreign Guarantor will furnish to the Holders, within 60 days after the date the payment of any taxes so withheld or deducted is made, certified copies of tax receipts evidencing payment by the Foreign Guarantor or if, notwithstanding such entity’s efforts to obtain receipts, receipts are not obtained, other evidence of payments by such entity.
References to the payment of amounts based on the principal amount, or interest on any other amount payable under, or with respect to, any of the Notes, shall be deemed to include the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
The obligation set forth in this Section 2.5 will survive any termination, defeasance or discharge of the Original Indenture or any transfer by a Holder of its Notes, and will apply, mutatis mutandis, to any Tax Jurisdiction applicable to any successor person to any Foreign Guarantor.
ARTICLE III
MISCELLANEOUS
Section 3.1 Relationship to Existing Original Indenture. This Supplemental Indenture is a supplemental indenture within the meaning of the Original Indenture. The Original Indenture, as supplemented and amended pursuant to this Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Original Indenture, as supplemented and amended through this Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
Section 3.2 Modification of the Existing Original Indenture. Except as expressly modified through this Supplemental Indenture, the provisions of the Original Indenture shall govern the terms and conditions of the Notes.
Section 3.3 Governing Law. This Supplemental Indenture, the Notes and the Guarantees shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to its conflict of laws provisions that would result in the application of the laws of any other jurisdiction (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York). To the fullest extent permitted by law, any legal suit, action or proceeding arising out of or based upon this Supplemental Indenture or the transactions contemplated hereby may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case based in the City of New York, and each party to this Supplemental Indenture will submit to the non-exclusive jurisdiction of such suit, action or proceeding.
Section 3.4 Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The words “execution,” “signed,” “signature” and words of like import in this Supplemental Indenture shall include images of manually executed signatures transmitted by facsimile, email or other electronic format (including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including without limitation, DocuSign and AdobeSign or any other similar platform identified by the Company and reasonably available at no undue burden or expense to the Trustee). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code. Without limitation to the foregoing, and anything in this Supplemental Indenture or the Original Indenture to the contrary notwithstanding, (a) any Officer’s Certificate, written order of the Company, Opinion of Counsel, Note, amendment, notice, direction, certificate of authentication appearing on or attached to any Note, supplemental indenture or other certificate, opinion of counsel, instrument, agreement or other document delivered pursuant to this Supplemental Indenture may be executed, attested and transmitted by any of the foregoing electronic means and formats and (b) all references in Article II of the Original Indenture or in this Supplemental Indenture to the execution, attestation or authentication of any Note or any certificate of authentication appearing on or attached to any Note by means of a manual or facsimile or other electronic signature shall be deemed to include signatures that are made or transmitted by any of the foregoing electronic means or formats. The Trustee shall have no duty to inquire into or investigate the authenticity or authorization of any such electronic
signature and shall be entitled to conclusively rely on any such electronic signature without any liability with respect thereto.
Section 3.5 Trustee Not Responsible for Recitals. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture or of the Notes. The Trustee shall not be accountable for the use of or application by the Company of the proceeds of the offering of the Securities. The Trustee represents that it is duly authorized to execute and deliver this Supplemental Indenture and perform its obligations hereunder. The Trustee accepts the amendments of the Original Indenture effected by this Supplemental Indenture, but on the terms and conditions set forth in the Original Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee. Without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, or for or with respect to (i) the validity or sufficiency of this Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company by action or otherwise, (iii) the due execution hereof by the Company or (iv) the consequences of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters.
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The parties hereto caused this Supplemental Indenture to be duly executed as of the date first set forth above.
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| F&G Annuities & Life, Inc., as the Company | |
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| By: | | |
| Name: | |
| Title: | |
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| CF Bermuda Holdings Limited, as a Guarantor | |
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| Name: | |
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| FGL US Holdings Inc., as a Guarantor | |
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| Name: | |
| Title: | |
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| Fidelity & Guaranty Life Business Services, Inc., as a Guarantor |
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| By: | | |
| Name: | |
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| Fidelity & Guaranty Life Holdings, Inc., as a Guarantor |
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| Citibank, N.A., as Trustee | |
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| By: | | |
| Name: | |
| Title: | |
{Signature Page to Supplemental Indenture}
Annex A
{FORM OF NOTE}
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO CEDE & CO., ITS NOMINEE OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE (AS DEFINED HEREIN).
F&G ANNUITIES & LIFE, INC.
[____]% Senior Notes due 2053
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No. _________ | | CUSIP No. _________ |
$___________ | | ISIN _________ |
F&G Annuities & Life, Inc., a Delaware corporation (the “Company,” which term includes any successor Person thereto under the Indenture hereinafter referred to), for value received, hereby promises to pay to {Cede & Co.}{_______}, or its registered assigns, the principal sum {of $________ Dollars}{set forth on the Schedule of Increases or Decreases in the Global Certificate attached hereto} (or such lesser or greater amount as shall be outstanding hereunder from time to time in accordance with Sections 2.1 and 2.8 of the Original Indenture hereinafter referred to) on December 15, 2053 (the “Maturity Date”) and to pay interest thereon at a rate of [ ____]% per year (as the same may be adjusted from time to time pursuant to Section 2.2 of the Supplemental Indenture hereinafter referred to), accruing from and including [______], 2023 (or the most recent Interest Payment Date (as defined below) to which interest on the Notes has been paid or made available for payment), payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning on March 15, 2024 (each such date, an “Interest Payment Date”), and at the Maturity Date, until the principal hereof is paid or made available for payment. For purposes of this Note, the Original Indenture and the Supplemental Indenture, the term “interest” shall be deemed to include interest provided for in the immediately preceding sentence and in Section 2.2 of the Supplemental Indenture.
Each interest payment due on an Interest Payment Date or the Maturity Date will include interest accrued from and including the most recent Interest Payment Date to which interest on the Notes has been paid or made available for payment (or, if no interest has been paid, [______], 2023) to, but excluding, the next Interest Payment Date or the Maturity Date or any Redemption Date or Tax Redemption Date, as the case may be. Interest on the Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months. If any Interest Payment Date falls on a date that is not a Business Day, such payment of interest (or principal in the case of the Maturity Date) will be postponed until the next succeeding Business Day, but no interest or other amount will be paid as a result of any such postponement, and such payment will have the same force and effect as if made on the scheduled Interest Payment Date.
Interest on each Interest Payment Date shall be payable to the Person in whose name the Notes are registered at the close of business on the regular record date for such Interest Payment Date, which regular record
date shall be the March 1, June 1, September 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each, a “Regular Record Date”); provided, however, that interest due on the Maturity Date or any Redemption Date or Tax Redemption Date (in each case, whether or not an Interest Payment Date) will be paid to the Person to whom principal of such Notes is payable (subject to the rights of Holders on the relevant Regular Record Date to receive interest due on any Interest Payment Date preceding the Maturity Date, Redemption Date or Tax Redemption Date). Any such interest not so punctually paid or duly provided for will constitute defaulted interest, will forthwith cease to be payable to the Holder on such Regular Record Date and may be paid by the Company as set forth in Section 2.7 of the Original Indenture.
Payment of the principal of, and interest and premium, if any, on this Note shall be made at the Corporate Trust Office, in such currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided that, for so long as this Note is in global form represented by this Global Certificate, all payments in respect hereof (including principal, interest and premium, if any) shall be made by wire transfer of immediately available funds to DTC or its nominee, as the case may be, as the registered owner of this Global Certificate. In the event that Definitive Certificates shall have been issued, all payments of principal, interest and premium, if any, shall be made by wire transfer of immediately available funds in accordance with the wire instructions of the registered Holders thereof appearing in the Securities Register or, if no such wire instructions are specified, by mailing a check to the address of each Holder of a Definitive Certificate appearing in the Securities Register.
All terms used in this Note which are defined in the Indenture and not defined herein shall have the meanings ascribed thereto in the Indenture. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company caused this instrument to be duly executed.
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| F&G Annuities & Life, Inc., as the Company | |
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| Name: | |
| Title: | |
This is one of the Security Certificates representing Securities of the Series designated herein and referred to in the within-mentioned Indenture.
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| Date: | ________________ | | CITIBANK, N.A., as Trustee | |
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| | | __________________________________ | |
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| | | By________________________________ | |
| | | | Authorized Signatory | |
{FORM OF REVERSE OF NOTE}
This Note is one of a duly authorized issuance of securities of the Company (the “Notes”), issued and to be issued in one or more series under an Indenture, dated as of January 13, 2023 (the “Base Indenture”), among the Company, the Guarantors from time to time party thereto and Citibank, N.A., as Trustee (the “Trustee,” which term includes any successor Trustee under the Indenture), as supplemented by the Second Supplemental Indenture, dated as of January 26, 2023 (together with the Base Indenture, the “Original Indenture”), between CF Bermuda Holdings Limited and the Trustee and by a Third Supplemental Indenture, dated as of [______], 2023 (the “Supplemental Indenture,” and, together with the Original Indenture, the “Indenture”), among the Company, the Guarantors from time to time party thereto and the Trustee. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the maximum extent permitted by law, in the case of any conflict between the provisions of this Note and the Indenture, the provisions of the Indenture shall control.
This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $_________. The Company may at any time issue additional Securities under the Indenture in unlimited amounts having the same terms as the Notes (except as otherwise provided in the Indenture) so that such additional Securities shall be consolidated with the Notes, including for purposes of voting and redemption; provided, however, that the Company shall use a separate CUSIP number for any such additional Securities that (a) are not part of the same issue as the Notes within the meaning of U.S. Treasury Regulations sections 1.1275-1(f) and 1.1275-2(k) and (b) have, for purposes of U.S. federal income taxation, more than a de minimis amount of original issue discount as of the date of the issue of such additional Securities. Any such additional Securities shall, together with the outstanding Notes, constitute a single series of Securities under the Indenture.
Guarantees
To guarantee payment of principal of and interest and premium, if any, on the Notes and all other amounts payable by the Company under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration, redemption, repurchase or otherwise, according to the terms of this Note and the Indenture, the Guarantors have fully and unconditionally guaranteed (and any future Guarantors shall fully and unconditionally guarantee), jointly and severally, such obligations pursuant to the terms of the Indenture.
Optional Redemption
On or after the Par Call Date, the Company may redeem the Notes at its option, in whole or in part, at any time and from time to time, at a Redemption Price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.
Subject to the conditions described in Section 2.3(c) of the Supplemental Indenture, the Company may redeem the Notes at its option, in whole but not in part, at a Redemption Price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding, the Tax Redemption Date.
In the event of redemption of this Note in part only, a new Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof; provided that the principal amount of any such Note remaining outstanding after a redemption in part shall be $25 or any integral multiple of $25 in excess thereof.
Unless the Company defaults in payment of the Redemption Price and accrued and unpaid interest, on and after the Redemption Date or the Tax Redemption Date, as applicable, interest will cease to accrue on the Notes or portions thereof called for redemption and all rights hereunder will terminate. No later than 9:00 a.m., New York
time, on any Redemption Date or any Tax Redemption Date, the Company is required to deposit with a Paying Agent or the Trustee (or, if the Company or any Guarantor is acting as Paying Agent, set aside, segregate and hold in trust as provided in Section 3.4 of the Original Indenture) an amount of money sufficient to pay the Redemption Price of and accrued and unpaid interest on the Notes to be redeemed on such Redemption Date or such Tax Redemption Date, as applicable. If the Company is redeeming less than all the Notes, the Notes to be redeemed shall be selected by lot by DTC, in the case of this Global Certificate, or by the Trustee by a method the Trustee deems to be fair and appropriate, in the case of any Notes that are not represented by a Global Certificate.
Change of Control Triggering Event
If a Change of Control Triggering Event with respect to the Notes occurs, unless the Company has exercised its right pursuant to the preceding section to redeem the Notes, the Company shall be required to make an offer to repurchase all or, at the Holder’s option, any part (equal to $25 or an integral multiple of $25 in excess thereof) of such Holder’s Notes for a payment in cash equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest thereon to, but excluding, the repurchase date.
General Terms
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note and certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture or the Notes of any series or the Guarantees thereunder may be amended or supplemented, and compliance with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences may be waived, in each case as provided in the Indenture.
The Notes will not be entitled to the benefit of a sinking fund.
As provided in, and subject to the provisions of, the Indenture, the Holder of this Note may institute an action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to the Indenture, this Note or the Guarantees, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder or under the Indenture only if: (i) such Holder has given to the Trustee written notice of a default and of the continuance thereof; (ii) the Holders of not less than 25% in aggregate principal amount of the Notes then Outstanding have made a written request upon the Trustee to institute such action or proceedings in its own name as trustee under the Indenture; (iii) the Holders of not less than 25% in aggregate principal amount of the Notes then Outstanding have offered to the Trustee such security or indemnity as it may require against the losses, expenses and liabilities to be incurred in connection with such action or proceedings; (iv) the Trustee, for 60 days after its receipt of such notice, request and offer of security or indemnity has failed to institute any such action or proceeding; and (v) the Holders of a majority in aggregate principal amount of the Securities of each series affected (with each series treated as a separate class) at the time Outstanding have not given the Trustee a direction inconsistent with such written request. However, the right of the Holder hereof to receive payment of the principal of and any interest on this Note at the rates, in the amount and in the currency prescribed herein on or after the due dates expressed herein, or to institute suit for the enforcement of any such payment on or after such dates, shall not be impaired or affected without the consent of such Holder. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligations of the Company and the Guarantors, which are absolute and unconditional, to pay the principal of and any interest on this Note at the times, place and rate, and in the currency, prescribed herein.
As provided in the Indenture and subject to certain limitations set forth therein, this Note may be presented or surrendered for registration of transfer or for exchange or redemption at the Place of Payment, duly endorsed, or accompanied by a written instrument of transfer in form satisfactory to, the Company and the Registrar for this Note,
duly executed by the Holder hereof or the Holder’s attorney duly authorized in writing. No service charge shall be made to the Holder for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may deem and treat the Person in whose name this Note is registered upon the Securities Register for the Notes as the owner hereof (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon) for all purposes, regardless of any notice to the contrary.
The Notes are issuable only in registered form in minimum denominations of $25 and integral multiples of $25 in excess thereof.
This Note and the Indenture and the Guarantees shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to its conflict of laws provisions that would result in the application of the laws of any other jurisdiction (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York). To the fullest extent permitted by law, any legal suit, action or proceeding arising out of or based upon this Note or the Indenture or the transactions contemplated hereby may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case based in the City of New York, and each party to this Note and the Indenture will submit to the non-exclusive jurisdiction of such suit, action or proceeding.
* * *
SCHEDULE OF INCREASES OR DECREASES IN THE GLOBAL CERTIFICATE
The initial outstanding principal amount of this Global Certificate is $__________. The following increases or decreases in this Global Certificate have been made:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Date of Exchange | | Amount of decreases in Principal Amount of this Global Certificate | | Amount of increases in Principal Amount of this Global Certificate | | Principal amount of this Global Certificate following such decreases or increases | | Signature of authorized signatory of Trustee |
| | | | | | | | |
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
| | | | | | | | | | | | | | |
| | ONE MANHATTAN WEST | | FIRM/AFFILIATE OFFICES -------- BOSTON CHICAGO HOUSTON LOS ANGELES PALO ALTO WASHINGTON, D.C. WILMINGTON -------- BEIJING BRUSSELS FRANKFURT HONG KONG LONDON MUNICH PARIS SAO PAULO SEOUL SHANGHAI SINGAPORE TOKYO TORONTO |
| | NEW YORK, NY 10001 | |
| | | |
| | TEL: (212) 735-3000 | |
| | FAX: (212) 735-2000 | |
| | www.skadden.com | |
| | | |
| | November 27, 2023 |
| | | |
F&G Annuities & Life, Inc.
801 Grand Avenue, Suite 2600
Des Moines, Iowa 50309
| | | | | |
| Re: | F&G Annuities & Life, Inc. |
| Registration Statement on Form S-1 |
Ladies and Gentlemen:
We have acted as special United States counsel to F&G Annuities & Life, Inc., a Delaware corporation (the “Company”), in connection with the public offering by the Company of $250,000,000 aggregate principal amount of the Company’s Senior Notes due 2053 (the “Notes” and, together with the Guarantees (as defined below) thereof by the Guarantors (as defined below), the “Securities”). The Notes are to be issued under the Indenture, dated as of January 13, 2023 (the “Base Indenture”), among the Company, the entities identified on Schedule 1 hereto (collectively, the “Delaware Guarantors”; the Delaware Guarantors, together with the Company, the “Specified Opinion Parties”) and Citibank, N.A., as trustee (the “Trustee”), as supplemented by the Second Supplemental Indenture, dated as of January 26, 2023 (the “Second Supplemental Indenture”), between CF Bermuda Holdings Limited (“CF Bermuda” and, together with the Delaware Guarantors, the “Guarantors”; the Guarantors collectively with the Company, the “Opinion Parties” and each, an “Opinion Party”) and the Trustee, and the Third Supplemental Indenture (the “Third Supplemental Indenture” and, together with the Base Indenture and the Second Supplemental Indenture, the “Indenture”), among the Company, the Guarantors and the Trustee. The Indenture provides for the guarantee of the Notes by the Guarantors.
This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933 (the “Securities Act”).
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November 27, 2023
Page 2
In rendering the opinions stated herein, we have examined and relied upon the following:
(a)the registration statement on Form S-1 of the Company and the Guarantors relating to the Securities to be filed on the date hereof with the Securities and Exchange Commission (the “Commission”) under the Securities Act, including the information deemed to be a part of the registration statement pursuant to Rule 430A of the General Rules and Regulations under the Securities Act (the “Rules and Regulations”) (such registration statement, as so amended, being hereinafter referred to as the “Registration Statement”);
(b)the form of the Underwriting Agreement (the “Underwriting Agreement”) proposed to be entered into among the Company, the Guarantors and Wells Fargo Securities, LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC, as representatives (the “Representatives”) of the several underwriters (the “Underwriters”) named therein, relating to the sale by the Company to the Underwriters of the Notes, filed as Exhibit 1.1 to the Registration Statement;
(c)an executed copy of the Base Indenture, including Article 10 thereof containing the guaranty obligations of the Delaware Guarantors of the Notes (the “Delaware Guarantor Guarantees”);
(d)an executed copy of the Second Supplemental Indenture, including Section 2.1 thereof containing the guaranty obligations of CF Bermuda of the Notes on the terms and subject to the conditions set forth in the Base Indenture, including, but not limited to, Article 10 thereof (the “CF Bermuda Guarantee” and, together with the Delaware Guarantor Guarantees, the “Guarantees”);
(e)the Third Supplemental Indenture;
(f)the form of global certificate evidencing the Notes to be registered in the name of Cede & Co. and included as an exhibit to the Registration Statement (the “Note Certificate”);
(g)an executed copy of a certificate of Jodi Ahlman, General Counsel and Secretary of the Company, dated the date hereof (the “Issuer Secretary’s Certificate”);
(h)executed copies of the certificates of Jodi Ahlman, Secretary of each of the Delaware Guarantors, each dated the date hereof (together with the Issuer Secretary’s Certificate, the “Secretaries’ Certificates” and each, a “Secretary’s Certificate”);
(i)copies of each Specified Opinion Party’s Certificate of Incorporation, as amended and in effect as of the date specified on Schedule 2 hereto, and certified by the Secretary of State of the State of Delaware as of the date specified on Schedule 2 hereto and certified pursuant to the applicable Secretary’s Certificate;
(j)copies of each Specified Opinion Party’s Bylaws, as amended and in effect as of the date specified on Schedule 2 hereto, and certified pursuant to the applicable Secretary’s Certificate; and
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(k)copies of certain resolutions adopted by the Board of Directors (or committee thereof) of each Specified Opinion Party, as of the date specified on Schedule 2 hereto, certified pursuant to the applicable Secretary’s Certificate.
We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Opinion Parties and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Opinion Parties and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinions stated below.
In our examination, we have assumed the genuineness of all signatures, including electronic signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photocopied copies, and the authenticity of the originals of such copies. As to any facts relevant to the opinions stated herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Opinion Parties and others and of public officials, including the facts and conclusions set forth in the Secretary’s Certificates and the factual representations and warranties contained in the Transaction Documents (as defined below).
We do not express any opinion with respect to the laws of any jurisdiction other than (i) the laws of the State of New York and (ii) the General Corporation Law of the State of Delaware (the “DGCL”) (all of the foregoing being referred to as the “Opined-on Law”).
As used herein, “Transaction Documents” means the Indenture (including the Guarantees provided for therein), and the Note Certificate.
Based upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the opinion that:
1.When (i) the Registration Statement, as finally amended (including all necessary post-effective amendments), has become effective under the Securities Act; (ii) the Underwriting Agreement has been duly authorized, executed and delivered by the Company and the other parties thereto; (iii) the Third Supplemental Indenture has been duly authorized, executed and delivered by the Company and the other parties thereto; and (iv) the Note Certificate, in the form examined by us has been duly authorized by all requisite corporate action on the part of the Company under the DGCL and, when executed by the Company and duly authenticated by the Trustee and issued and delivered by the Company against payment therefor in accordance with the terms of the Underwriting Agreement and the Indenture, the Note Certificate will constitute the valid and binding obligation of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with its terms under the laws of the State of New York.
2.The Guarantee of each Delaware Guarantor has been duly authorized by all requisite corporate action on the part of such Delaware Guarantor under the DGCL and, when
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the Note Certificate is executed by the Company and duly authenticated by the Trustee and issued and delivered by the Company against payment therefor in accordance with the terms of the Underwriting Agreement and the Indenture, the Guarantee of each Guarantor will constitute the valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms under the laws of the State of New York.
The opinions stated herein are subject to the following qualifications:
(a)we do not express any opinion with respect to the effect on the opinions stated herein of any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, preference and other similar laws or governmental orders affecting creditors’ rights generally, and the opinions stated herein are limited by such laws and orders and by general principles of equity (regardless of whether enforcement is sought in equity or at law);
(b)we do not express any opinion with respect to the effect on the opinions stated herein of (i) the compliance or non-compliance of any party to any of the Transaction Documents with any laws, rules or regulations applicable to such party or (ii) the legal status or legal capacity of any party to any of the Transaction Documents;
(c)we do not express any opinion with respect to any law, rule or regulation that is applicable to any party to any of the Transaction Documents or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable to any such party or any of its affiliates as a result of the specific assets or business operations of such party or such affiliates;
(d)except to the extent expressly stated in the opinions contained herein, we have assumed that each of the Transaction Documents constitutes the valid and binding obligation of each party to such Transaction Document, enforceable against such party in accordance with its terms;
(e)the opinions stated herein are limited to the agreements and documents specifically identified in the opinions contained herein without regard to any agreement or other document referenced in such agreement or document (including agreements or other documents incorporated by reference or attached or annexed thereto);
(f)we do not express any opinion with respect to the enforceability of any provision contained in any Transaction Document relating to any indemnification, contribution, non-reliance, exculpation, release, limitation or exclusion of remedies, waiver or other provisions having similar effect that may be contrary to public policy or violative of federal or state securities laws, rules or regulations, or to the extent any such provision purports to, or has the effect of, waiving or altering any statute of limitations;
(g)we do not express any opinion with respect to the enforceability of any provision contained in any Transaction Document purporting to prohibit, restrict or condition the assignment of rights under such Transaction Document to the extent that such prohibition, restriction or condition on assignability is ineffective pursuant to the Uniform Commercial Code;
F&G Annuities & Life, Inc.
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(h)to the extent that any opinion relates to the enforceability of the choice of New York law and choice of New York forum provisions contained in any Transaction Document, the opinions stated herein are subject to the qualification that such enforceability may be subject to, in each case, (i) the exceptions and limitations in New York General Obligations Law sections 5-1401 and 5-1402 and (ii) principles of comity and constitutionality;
(i)we do not express any opinion with respect to Section 12.9 of the Base Indenture to the extent that such section provides for a waiver of trial by jury;
(j)we call to your attention that irrespective of the agreement of the parties to any Transaction Document, a court may decline to hear a case on grounds of forum non conveniens or other doctrine limiting the availability of such court as a forum for resolution of disputes; in addition, we call to your attention that we do not express any opinion with respect to the subject matter jurisdiction of the federal courts of the United States of America in any action arising out of or relating to any Transaction Document;
(k)we do not express any opinion with respect to the enforceability of Section 10.1 of the Base Indenture and Section 2.1 of the Second Supplemental Indenture to the extent that such sections provide that the obligations of the Guarantors are absolute and unconditional irrespective of the enforceability or genuineness of the Indenture or the effect thereof on the opinions herein stated;
(l)we do not express any opinion with respect to the enforceability of the provisions contained in Section 10.2 of the Base Indenture to the extent that such provisions limit the obligation of the Guarantors under the Indenture or any right of contribution of any party with respect to the obligations under the Indenture;
(m)we call to your attention that the opinions stated herein are subject to possible judicial action giving effect to governmental actions or laws of jurisdictions other than those with respect to which we express our opinion;
(n)we do not express any opinion with respect to the enforceability of any provision contained in any Transaction Document providing for indemnity by any party thereto against any loss in obtaining the currency due to such party under any Transaction Document from a court judgment in another currency;
(o)we do not express any opinion whether the execution or delivery of any Transaction Document by any Opinion Party, or the performance by any Opinion Party of its obligations under any Transaction Document to which such Opinion Party is a party will constitute a violation of, or a default under, any covenant, restriction or provision with respect to financial ratios or tests or any aspect of the financial condition or results of operations of any Opinion Party or any of its subsidiaries; and
(p)we have assumed that subsequent to the effectiveness of the Base Indenture, the Base Indenture has not been modified, amended, restated, supplemented or terminated, other than by the First Supplemental Indenture, the Second Supplemental Indenture and the Third
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Supplemental Indenture, and that the Indenture will constitute the valid and binding obligation of the Opinion Parties immediately prior to the issuance of the Note Certificate and the Guarantees.
In addition, in rendering the foregoing opinions we have assumed that:
(a)CF Bermuda (i) is duly organized and is validly existing and in good standing, (ii) has requisite legal status and legal capacity under the laws of the jurisdiction of its organization and (iii) has complied and will comply with all aspects of the laws of the jurisdiction of its organization in connection with the transactions contemplated by, and the performance of its obligations under, the Transaction Documents to which CF Bermuda is a party;
(b)CF Bermuda has the corporate power and authority to execute, deliver and perform all its obligations under each of the Transaction Documents to which CF Bermuda is a party;
(c)each of the Transaction Documents to which CF Bermuda is a party has been duly authorized, executed and delivered by all requisite corporate action on the part of CF Bermuda;
(d)neither the execution and delivery by each Opinion Party of the Transaction Documents to which it is a party nor the performance by such Opinion Party of its obligations under each of the Transaction Documents to which it is a party, including the issuance of the Notes and the Guarantees: (i) conflicts or will conflict with the organizational documents of CF Bermuda, (ii) constitutes or will constitute a violation of, or a default under, any lease, indenture, agreement or other instrument to which any Opinion Party or its property is subject (except that we do not make the assumption set forth in this clause (ii) with respect to those agreements or instruments expressed to be governed by the laws of the State of New York which are filed in Part II of the Registration Statement or the Company’s Annual Report on Form 10-K for the year ended December 31, 2022), (iii) contravenes or will contravene any order or decree of any governmental authority to which any Opinion Party or its property is subject, or (iv) violates or will violate any law, rule or regulation to which any Opinion Party or its property is subject (except that we do not make the assumption set forth in this clause (iv) with respect to the Opined-on Law); and
(e)neither the execution and delivery by each Opinion Party of the Transaction Documents to which it is a party nor the performance by each Opinion Party of its obligations under each of the Transaction Documents to which it is a party, including the issuance of the Notes and the Guarantees, requires or will require the consent, approval, licensing or authorization of, or any filing, recording or registration with, any governmental authority under any law, rule or regulation of any jurisdiction.
We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the General Rules and Regulations under the Securities Act. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any
F&G Annuities & Life, Inc.
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subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable law.
| | | | | |
| Very truly yours, |
| |
| /s/ Skadden, Arps, Slate, Meagher & Flom LLP |
| |
| DSY | |
Schedule 1
Delaware Guarantors
1.FGL US Holdings Inc., a Delaware corporation
2.Fidelity & Guaranty Life Business Services, Inc., a Delaware corporation
3.Fidelity & Guaranty Life Holdings, Inc., a Delaware corporation
Schedule 2
Resolutions, Certification and Governance Documents of the Specified Opinion Parties
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Date of Charter Certification by Delaware Secretary of State | | Description of Certified Charter | | Description of Bylaws | | Date of Adoption of Resolutions |
| F&G Annuities & Life, Inc. | | November 20, 2023 | | Amended and Restated Certificate of Incorporation dated as of November 30, 2022 | | Amended and Restated Bylaws dated as of November 30, 2022 | | November 7, 2023 |
| FGL US Holdings Inc. | | November 20, 2023 | | Certificate of Incorporation dated as of May 19, 2017 | | Bylaws dated as of May 19, 2017 | | November 27, 2023 |
| Fidelity & Guaranty Life Business Services, Inc. | | November 20, 2023 | | Certificate of Incorporation dated as of February 8, 2001, as amended on September 11, 2001, March 3, 2004 and April 11, 2011 | | Bylaws dated as of February 8, 2001 | | November 27, 2023 |
| Fidelity & Guaranty Life Holdings, Inc. | | November 20, 2023 | | Certificate of Incorporation dated as of January 25, 2001, as amended on March 15, 2001, April 11, 2011, May 16, 2012 and December 27, 2012 | | Bylaws dated as of November 1, 2001 | | November 27, 2023 |
CF Bermuda Holdings Limited
Sterling House
16 Wesley Street
Hamilton HM 11
Bermuda
Our ref: 7598-003
November 27, 2023
Dear Sirs/Madams,
CF Bermuda Holdings Limited – Registration Statement on Form S-1
We have acted as special legal counsel in Bermuda to CF Bermuda Holdings Limited, a Bermuda exempted company (the “Company”), in connection with the preparation of a registration statement on Form S-1 filed by, inter alios, the Company, as a Guarantor (as defined below), on or about the date hereof with the U.S. Securities and Exchange Commission (the “Commission”) under the U.S. Securities Act of 1933 (the “Securities Act”) (such registration statement being hereinafter referred to as the “Registration Statement”) relating to the proposed offering and sale of the Senior Notes due 2053 of F&G Annuities & Life, Inc., a Delaware corporation (“F&G”) (the “Notes”), to be issued pursuant to the Indenture (as defined below).
The Notes are to be issued under the Indenture, dated as of January 13, 2023, among F&G, certain guarantors thereunder (the “Delaware Guarantors”), the Company (together with the Delaware Guarantors, the “Guarantors” and each a “Guarantor”) and Citibank, N.A., as trustee (the “Trustee”), as amended and supplemented from time to time (the “Indenture”). The Indenture provides for the full and unconditional guarantee of payments on the Notes by the Guarantors, jointly and severally, on a senior unsecured, unsubordinated basis (collectively, the “Guarantees”).
1.For the purpose of giving this opinion, we have reviewed the following documents (collectively, the “Documents”):
1.1a copy of the Registration Statement;
1.2a copy of the Indenture (inclusive of the Guarantee provided by the Company);
1.3copies of the memorandum of association and the bye-laws of the Company (together the “Constitutional Documents”), each certified by the Secretary of the Company under the Secretary’s Certificate (as defined below);
1.4a copy of the unanimous written resolutions (the “Resolutions”) of the board of directors of the Company (the “Board”) dated November 27, 2023, pursuant to which the board of directors of the Company authorised the entry into the Indenture (and the Guarantee provided by the Company), as certified by the Secretary of the Company under the Secretary’s Certificate;
1.5a copy of a certificate of compliance from the Registrar of Companies in Bermuda in respect of the Company dated November 22, 2023, as certified by the Secretary of the Company under the Secretary’s Certificate;
1.6a certificate in respect of the Company signed by the Secretary of the Company and dated the date hereof (the “Secretary’s Certificate”); and
1.7such other documents in relation thereto as we have deemed necessary in order to render the opinions given below.
2.We have assumed for the purposes of this opinion:
2.1the genuineness and authenticity of all signatures and the conformity to the originals of all copies (whether or not certified) examined by us and the authenticity and completeness of the originals from which such copies were taken;
2.2that where a document has been examined by us in draft form, it will be or has been executed and/or filed in the form of that draft, and where a number of drafts of a document have been examined by us all changes thereto have been marked or otherwise drawn to our attention;
2.3the accuracy and completeness of all factual representations made in the Documents reviewed by us;
2.3that other than the supplemental indentures thereto, there are no agreements or arrangements in existence which in any way amend or vary the terms of the Indenture;
2.4that the resolutions set forth in the Resolutions are in full force and effect, have not been rescinded, superseded, varied or amended and that there is no matter affecting the authority of the directors to effect entry by the Company into the Indenture, not disclosed by the Constitutional Documents or the Resolutions, which would have any adverse implication in relation to the opinions expressed herein;
2.5that the Constitutional Documents will not be amended in any manner that would affect the opinions set forth herein;
2.6that there is no provision of the laws or regulations of any jurisdiction, other than Bermuda, which would have any implication in relation to the opinions expressed in this opinion;
2.7the capacity, power and authority of all parties other than the Company to enter into and perform their obligations under any and all documents entered into by such parties in connection with the Indenture, and the due execution and delivery thereof by each party thereto, other than the Company; and
2.8the Company is able to pay its liabilities as they become due.
3.On the basis of and subject to the foregoing, and further subject to the reservations set out below and any matters not disclosed to us, we are of the opinion that:
3.1The Company is an exempted company duly incorporated with limited liability and is validly existing and in good standing under the laws of Bermuda (meaning solely that the Company has not failed to make any filing with any Bermuda governmental authority or to pay any Bermuda government fee or tax which might make it liable to be struck off the Register of Companies and thereby cease to exist under the laws of Bermuda).
3.2When the Notes are duly authenticated by the Trustee and issued and delivered by F&G against payment therefor in accordance with the terms of the underwriting agreement relating thereto and the Indenture, the Guarantee of the Company will constitute the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms under the laws of Bermuda.
4.The term “enforceable” when used in this opinion means that the obligation is of a type which the courts of Bermuda enforce. It does not mean that those obligations will be enforced in all circumstances in accordance with the terms of the Guarantee. For example, the obligations of the Company under the Guarantee (a) will be subject to the laws from time to time in effect relating to bankruptcy, insolvency, liquidation, possessory liens, rights of set off, reorganisation, amalgamation, merger, moratorium or any other laws or legal procedures, whether of a similar nature or otherwise, generally affecting the rights of creditors including (without limiting the foregoing) the provisions of Part IVA of the Conveyancing Act 1983, (b) will be subject to statutory limitation of the time within which proceedings may be brought, (c) will be subject to general principles of equity and, as such, specific performance and injunctive relief, being equitable remedies, may not be available where damages are considered to be an adequate remedy, (d) may not be given effect to by a Bermuda court, if and to the extent they constitute the payment of an amount which is in the nature of a penalty and not in the nature of liquidated damages; (e) may not be given
effect to the extent they are to be performed in a jurisdiction outside Bermuda and such performance would be illegal under the laws of that jurisdiction. Notwithstanding any contractual submission to the jurisdiction of specific courts, a Bermuda court has inherent discretion to stay or allow proceedings in the Bermuda courts.
5.We express no opinion as to the enforceability of any provision contained in the Guarantee provided by the Company which provides for the payment of a specified rate of interest on the amount of a judgment after the date of judgment. Provisions in the Guarantee provided by the Company (a) providing that a party shall not exercise a right or comply with an obligation conferred or imposed by statute or (b) purporting to fetter any person’s statutory powers, may not be enforceable unless expressly permitted by statute. Section 24A of the Companies Act provides that, subject to the company’s memorandum of association and bye-laws, a company may agree that the powers given to the members of the company that are contained in sections 10 (change of name), 10A (registration/change of secondary name), 12 (change to memorandum of association), 13 (change to bye-laws), 45 (alteration of share capital), 46 (reduction of share capital), 93 (removal of directors), 104 (amalgamation of companies), 104H (merger of companies), 161 (resolution to be wound up by the court), or 201 (voluntary winding up) of the Companies Act 1981 shall, in whole or in part, not be exercised.
6.We have made no investigation of and express no opinion in relation to the laws of any jurisdiction other than Bermuda. This opinion is to be governed by and construed in accordance with the laws of Bermuda and is limited to and is given on the basis of the current law and practice in Bermuda.
7.This opinion is issued solely for the purposes of the filing of the Registration Statement with the Commission and shall not be relied upon in respect of any other matter.
8.This opinion speaks as of its date and is strictly limited to the matters stated herein and we assume no obligation to review or update this opinion if applicable law or the existing facts or circumstances should change.
9.We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to our firm in the Registration Statement. In giving this consent, we do not hereby admit that we are experts within the meaning of Section 11 of the Securities Act or that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder.
Yours faithfully,
/s/ ASW Law Limited
ASW Law Limited
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption “Experts” in the Registration Statement (Form S-1) and related Prospectus of F&G Annuities & Life, Inc. dated November 27, 2023 and to the incorporation by reference therein of our report dated February 27, 2023 (except for the adoption of ASU No. 2018-12 disclosed in Note W as to which the date is July 13, 2023) with respect to the consolidated financial statements of F&G Annuities & Life, Inc. included in its current report on Form 8-K dated July 13, 2023, filed with the Securities and Exchange Commission.
| | |
| /s/ Ernst & Young LLP |
|
| Des Moines, Iowa |
| November 27, 2023 |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of a Trustee
Pursuant to Section 305 (b)(2) ___
CITIBANK, N.A.
(Exact name of Trustee as specified in its charter)
| | | | | |
| A National Banking Association | 13-5266470 |
| (Jurisdiction of incorporation or organization | (I.R.S. Employer |
| if not a U.S. national bank) | Identification No. ) |
| |
| 399 Park Avenue, | |
| New York, New York | 10043 |
| (Address of principal executive office) | (Zip Code) |
Citibank, N.A.
388 Greenwich Street
New York, N.Y. 10013
(212) 816-0392
(Name, address, and telephone number of agent for service)
F&G Annuities & Life, Inc.
(Exact name of obligor as specified in its charter)
SEE TABLE OF ADDITIONAL REGISTRANTS
| | | | | |
| Delaware | 85-2487422 |
| (State or other jurisdiction of | (I.R.S. employer |
| incorporation or organization) | identification no.) |
| |
| 801 Grand Avenue, Suite 2600 | |
| Des Moines, Iowa | 50309 |
| (Address of principal executive offices) | (Zip Code) |
Debt Securities
(Title of Indenture Securities)
TABLE OF ADDITIONAL REGISTRANTS
| | | | | | | | | | | | | | | | | | | | |
| Exact name of registrant as specified in its charter* | | State or other jurisdiction of incorporation or organization | | Primary Standard Industrial Classification Code Number | | I.R.S. Employer
Identification
Number |
| CF Bermuda Holdings Limited | | Bermuda | | 6311 | | |
| FGL US Holdings Inc. | | Delaware | | 6311 | | 82-2796563 |
| Fidelity & Guaranty Life Business Services, Inc. | | Delaware | | 6311 | | 43-1914674 |
| Fidelity & Guaranty Life Holdings, Inc. | | Delaware | | 6311 | | 48-1245662 |
* The address and telephone number of each additional registrant is c/o F&G Annuities & Life, Inc., 801 Grand Avenue, Suite 2600, Des Moines, Iowa 50309, tel. (515) 330-3340.
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it is subject.
| | | | | |
| Name | Address |
| Comptroller of the Currency | Washington, D.C. |
| |
| Federal Reserve Bank of New York | 33 Liberty Street, New York, NY |
| |
| Federal Deposit Insurance Corporation | Washington, D.C. |
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affiliation.
None.
Items 3-15. Not Applicable.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of Eligibility.
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as exhibits hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee, as now in effect.
(Exhibit 1 to T-1 filed as exhibit to the Filing 305B2 dated October 5, 2012 under File No. 333-183223).
Exhibit 2 - Copy of certificate of authority of the Trustee to commence business.(attached).
Exhibit 3 - Copy of authorization of the Trustee to exercise corporate trust powers. (Exhibit 3 to T-1 filed May 5, 2014 under File No. 333-195697).
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 filed as exhibit to the Filing 305B2 dated October 5, 2012 under File No. 333-183223).
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 filed May 5, 2014 under File No. 333-195697).
Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as of
December 31, 2022- attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, Citibank, N.A., a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York and State of New York, on the 20th day of November, 2023.
| | | | | |
| CITIBANK, N.A. |
| |
| By | /s/ Peter Lopez |
| Peter Lopez |
| Vice President |
| | | | | |
| Office of the Comptroller of the Currency |
|
| Washington, DC 20219 |
CERTIFICATE OF CORPORATE EXISTENCE AND FIDUCIARY POWERS
I, Michael J. Hsu, Acting Comptroller of the Currency, do hereby certify that:
1.The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.
2."Citibank, N.A.," Sioux Falls, South Dakota( Charter No. 1461), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking and exercise fiduciary powers on the date of this certificate.
IN TESTIMONY WHEREOF, today, July 5, 2023, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
| | | | | | | | |
| /s/ Michael J. Hsu | |
| Acting Comptroller of the Currency | |
| | |
| | |
| 2023-00923-C | | |
| | | | | | | | | | | |
| In millions of dollars | December 31, |
| 2022 | | 2021 |
| Assets | | | |
| Cash and due from banks (including segregated cash and other deposits) | $ | 30,577 | | | $ | 27,515 | |
| Deposits with banks, net of allowance | 311,448 | | | 234,518 | |
Securities borrowed and purchased under agreements to resell (including $239,527 and $216,466 as of December 31, 2022 and 2021, respectively, at fair value), net of allowance | 365,401 | | | 327,288 | |
| Brokerage receivables, net of allowance | 54,192 | | | 54,340 | |
Trading account assets (including $133,535 and $133,828 pledged to creditors at December 31, 2022 and 2021, respectively) | 334,114 | | | 331,945 | |
| Investments: | | | |
Available-for-sale debt securities (including $10,933 and $9,226 pledged to creditors as of December 31, 2022 and 2021, respectively), net of allowance | 249,679 | | | 288,522 | |
Held-to-maturity debt securities (fair value of which is $243,648 and $216,038 as of December 31,2022 and 2021, respectively) (includes $— and $1,460 pledged to creditors as of December 31, 2022 and 2021, respectively), net of allowance | 268,863 | | | 216,963 | |
Equity securities (including $895 and $1,032 as of December 31, 2022 and 2021, respectively, at fair value) | 8,040 | | | 7,337 | |
| Total investments | $ | 526,582 | | | $ | 512,822 | |
| Loans: | | | |
Consumer (including $237 and $12 as of December 31, 2022 and 2021, respectively, at fair value) | 368,067 | | | 376,534 | |
Corporate (including $5,123 and $6,070 as of December 31, 2022 and 2021, respectively, at fair value) | 289,154 | | | 291,233 | |
| Loans, net of unearned income | $ | 657,221 | | | $ | 667,767 | |
Allowance for credit losses on loans (ACLL) | (16,974) | | | (16,455) | |
| Total loans, net | $ | 640,247 | | | $ | 651,312 | |
| Goodwill | 19,691 | | | 21,299 | |
| Intangible assets (including MSRs of $665 and $404 as of December 31, 2022 and 2021, respectively, at fair value) | 4,428 | | | 4,495 | |
| Premises and equipment, net of depreciation and amortization | 26,253 | | | 24,328 | |
| Other assets (including $10,658 and $12,342 as of December 31, 2022 and 2021, respectively, at fair value), net of allowance | 103,743 | | | 101,551 | |
| Total assets | $ | 2,416,676 | | | $ | 2,291,413 | |
Statement continues on the next page.
| | | | | | | | | | | |
| December 31, |
| In millions of dollars, except shares and per share amounts | 2022 | | 2021 |
Liabilities |
| | |
| Deposits (including $1,875 and $1,666 as of December 31, 2022 and 2021, respectively, at fair value) | $ | 1,365,954 | | | $ | 1,317,230 | |
| Securities loaned and sold under agreements to repurchase (including $70,886 and $56,694 as of December 31, 2022 and 2021, respectively, at fair value) | 202,444 | | | 191,285 | |
| Brokerage payables (including $4,439 and $3,575 as of December 31, 2022 and 2021, respectively, at fair value) | 69,218 | | | 61,430 | |
| Trading account liabilities | 170,647 | | | 161,529 | |
| Short-term borrowings (including $6,222 and $7,358 as of December 31, 2022 and 2021, respectively, at fair value) | 47,096 | | | 27,973 | |
| Long-term debt (including $105,995 and $82,609 as of December 31, 2022 and 2021, respectively, at fair value) | 271,606 | | | 254,374 | |
| Other liabilities | 87,873 | | | 74,920 | |
| Total liabilities | $ | 2,214,838 | | | $ | 2,088,741 | |
Stockholders’ equity |
| | |
Preferred stock ($1.00 par value; authorized shares: 30 million), issued shares: 759,800 as of December 31, 2022 and 759,800 as of December 31, 2021, at aggregate liquidation value | $ | 18,995 | | | $ | 18,995 | |
Common stock ($0.01 par value; authorized shares: 6 billion), issued shares: 3,099,669,424 as of December 31, 2022 and 3,099,651,835 as of December 31, 2021 | 31 | | | 31 | |
| Additional paid-in capital | 108,458 | | | 108,003 | |
| Retained earnings | 194,734 | | | 184,948 | |
Treasury stock, at cost: 1,162,682,999 shares as of December 31, 2022 and 1,115,296,641 shares as of December 31, 2021 | (73,967) | | | (71,240) | |
| Accumulated other comprehensive income (loss) (AOCI) | (47,062) | | | (38,765) | |
Total Citigroup stockholders’ equity | $ | 201,189 | | | $ | 201,972 | |
Noncontrolling interests | $ | 649 | | | $ | 700 | |
| Total equity | $ | 201,838 | | | $ | 202,672 | |
| Total liabilities and equity | $ | 2,416,676 | | | $ | 2,291,413 | |
The Notes to the Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.
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