CARMEL, Ind., May 20, 2013 /PRNewswire/ -- CNO Financial Group, Inc. (NYSE: CNO) reported today that it has successfully completed the previously announced amendment to its senior secured credit facility.
The changes to the senior secured credit facility include:
- Re-pricing of the following:
- $225.0 million four-year term loan from LIBOR +3.25% with 1.00% LIBOR floor to LIBOR+2.25% with 0.75% LIBOR floor, for an overall decrease of 125 basis points
- $406.2 million six-year term loan from LIBOR + 3.75% with 1.25% LIBOR floor to LIBOR+2.75% with 1.00% LIBOR floor, for an overall decrease of 125 basis points
- Modification for mandatory prepayments resulting from any Restricted Payments (as defined in our credit facility), including share repurchases and shareholder dividends.
- 100% prepayment for every $1 of Restricted Payments if Debt to Total Capitalization is greater than 25.0% (previously 22.5%)
- 33.3% prepayment for every $1 of Restricted Payments if Debt to Total Capitalization is less than or equal to 25.0% and greater than 20.0% (previously less than or equal to 22.5% but greater than 17.5%)
- There will be no required prepayment if Debt to Total Capitalization is less than or equal to 20.0% (previously 17.5%)
In addition to amended pricing and mandatory prepayment provisions, there were other modest adjustments made to provide additional flexibility.
"We are very pleased with the results of the re-pricing," said Fred Crawford, Chief Financial Officer of CNO. "This amendment will reduce our annual cash interest expense by nearly $8 million and allow us greater flexibility in managing our excess capital. These changes are consistent with CNO's continued strong performance and our ratings upgrade from S&P."
The principal balance outstanding under the senior secured credit facility remains at $631 million and no changes were made to the current amortization schedule. The amendment will reduce annual interest expense recognized in earnings by $6 million, including the amortization of transaction related costs. CNO expects to record a pretax charge of approximately $2 million in the second quarter of 2013 as a result of this transaction.
CNO is a holding company. Our insurance subsidiaries – principally Bankers Life and Casualty Company, Washington National Insurance Company and Colonial Penn Life Insurance Company – serve pre-retiree and retired Americans by helping them protect against financial adversity and provide for a more secure retirement. For more information, visit CNO online at www.CNOinc.com.
SOURCE CNO Financial Group, Inc.