Universal Insurance Holdings Issues $100M of 7.75% Senior Unsecured Notes
Universal Insurance Holdings, Inc. has entered into Note Purchase Agreements to issue and sell $100 million of 7.75% Senior Unsecured Notes due 2031 to institutional accredited investors and qualified institutional buyers. The net proceeds are intended for general corporate purposes, including the redemption of its outstanding 5.625% Senior Notes due 2026. The issuance was conducted as a private placement. The company also entered into Registration Rights Agreements, obligating it to register the notes for resale under the Securities Act, with potential for additional interest payments upon default. The Indenture governing the notes includes several financial covenants and events of default, which could impact dividend payments.
Key Highlights
- Universal Insurance Holdings issued $100 million of 7.75% Senior Unsecured Notes due 2031.
- Proceeds will be used for general corporate purposes, including redemption of outstanding 5.625% Senior Notes due 2026.
- The 2031 Notes are unsecured senior obligations and not guaranteed by any subsidiary.
- The Indenture includes covenants on cash on hand, debt to capitalization ratio, and incurring additional liens.
- Failure to meet Registration Rights Agreement obligations may result in additional interest payments.
- Events of default under the Indenture may lead to acceleration of obligations and suspension of dividend payments.
Price Impact
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