March 11, 2013
Meadowbrook Insurance Group, Inc.
(NYSE:MIG) ("Meadowbrook" or the "Company"), announced that it plans to make a private offering of
aggregate principal amount of its Cash Convertible Senior Notes due 2020 (the "notes"). Meadowbrook also plans to grant the initial purchasers of the notes an option to purchase up to an additional
aggregate principal amount of the notes. The notes will be offered only to qualified institutional buyers (as defined in the Securities Act of 1933, as amended (the "Securities Act") pursuant to Rule 144A under the Securities Act.
The notes are unsecured, and Meadowbrook expects to pay interest on the notes semiannually. The notes will be convertible at the option of the holders into solely cash in certain circumstances and during certain periods. The notes will not be convertible into Meadowbrook common stock or any other securities under any circumstances. Meadowbrook will not have the right to redeem the notes prior to maturity. The notes are expected to mature on
March 15, 2020
, unless earlier repurchased or converted into cash in accordance with their terms prior to such date. The interest rate, conversion rate and certain other terms of the notes will be determined by negotiations between Meadowbrook and the initial purchasers.
In connection with the pricing of the notes, the Company intends to enter into privately negotiated cash convertible note hedge transactions with one or more of the initial purchasers of the notes or their respective affiliates or other financial institutions (the "option counterparties"). The cash convertible note hedge transactions are expected to reduce the Company's exposure to potential cash payments due upon conversion of the notes in excess of the principal amount thereof. The Company also intends to enter into privately negotiated warrant transactions with the option counterparties, which could have a dilutive effect to the extent that the price of the Company's common stock exceeds the applicable strike price of the warrants. If the initial purchasers exercise their option to purchase additional notes, the Company may increase the size of the cash convertible note hedge transactions and enter into additional warrant transactions.