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CNO Financial Group Completes Amendment To Senior Secured Credit Facility

Stocks in this article: CNO













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.

About CNOCNO 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.

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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