Fairfax Completes US$600 Million Senior Notes Offering
March 03 2021 - 10:20AM
Fairfax Financial Holdings Limited (“Fairfax”) (TSX: FFH and FFH.U)
has completed its previously announced offering of US$600 million
in aggregate principal amount of 3.375% Senior Notes due 2031 (the
“Notes”). In connection with the closing of the offering, Fairfax
entered into a customary registration rights agreement.
Fairfax intends to use the net proceeds from the
offering to repay outstanding debt of Fairfax and its subsidiaries,
which may include a portion of the indebtedness under its unsecured
revolving credit facility. This may include the redemption or
repurchase of certain previously issued senior unsecured notes
and/or other debt securities of Fairfax and its subsidiaries.
Except as set forth above, as of the date hereof, Fairfax has not
made any determination as to the specific debt or other obligations
to be repaid, nor the amount, timing or method of repayment. Any
repurchase of senior unsecured notes and/or other debt securities
of Fairfax and its subsidiaries will be subject to market
conditions, and there can be no assurance that such notes or
securities will be available for repurchase on terms acceptable to
Fairfax.
The offering was made solely by means of a
private placement either to qualified institutional buyers pursuant
to Rule 144A under the U.S. Securities Act of 1933, as amended (the
“Securities Act”), or to certain non-U.S. persons in offshore
transactions pursuant to Regulation S under the Securities Act. The
Notes have not been registered under the Securities Act and the
Notes may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act. The Notes have not
been and will not be qualified for sale under the securities laws
of any province or territory of Canada and may not be offered or
sold directly or indirectly in Canada or to or for the benefit of
any resident of Canada, except pursuant to applicable prospectus
exemptions.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities in
any jurisdiction in which such offer or solicitation would be
unlawful. Any offers of the Notes have been made only by means of a
private offering memorandum.
Fairfax is a holding company which, through its
subsidiaries, is engaged in property and casualty insurance and
reinsurance and the associated investment management.
For further
information contact: |
John Varnell,
Vice President, Corporate Development at (416) 367-4941 |
Forward-looking information
Certain statements contained herein may include
“forward-looking information” within the meaning of Canadian
securities laws and “forward-looking statements” within the meaning
of Section 27A of the U.S. Securities Act of 1933, as amended,
Section 21E of the U.S. Securities Exchange Act of 1934, as
amended, “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations. Such forward-looking information
may include, among other things, the intended use of net proceeds
from the offering of Notes. Such forward-looking information are
subject to known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
Fairfax to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking information. Such factors include, but are not
limited to: our ability to refinance and/or repay certain of our
outstanding debt or other corporate obligations with the proceeds
of the offering on terms acceptable to us; a reduction in net
earnings if our loss reserves are insufficient; underwriting losses
on the risks we insure that are higher or lower than expected; the
occurrence of catastrophic events with a frequency or severity
exceeding our estimates; changes in market variables, including
interest rates, foreign exchange rates, equity prices and credit
spreads, which could negatively affect our investment portfolio;
risks associated with the global pandemic caused by COVID-19, and
the related global reduction in commerce and substantial downturns
in stock markets worldwide; the cycles of the insurance market and
general economic conditions, which can substantially influence our
and our competitors’ premium rates and capacity to write new
business; insufficient reserves for asbestos, environmental and
other latent claims; exposure to credit risk in the event our
reinsurers fail to make payments to us under our reinsurance
arrangements; exposure to credit risk in the event our insureds,
insurance producers or reinsurance intermediaries fail to remit
premiums that are owed to us or failure by our insureds to
reimburse us for deductibles that are paid by us on their behalf;
our inability to maintain our long term debt ratings, the inability
of our subsidiaries to maintain financial or claims paying ability
ratings and the impact of a downgrade of such ratings on derivative
transactions that we or our subsidiaries have entered into; risks
associated with implementing our business strategies; the timing of
claims payments being sooner or the receipt of reinsurance
recoverables being later than anticipated by us; risks associated
with any use we may make of derivative instruments; the failure of
any hedging methods we may employ to achieve their desired risk
management objective; a decrease in the level of demand for
insurance or reinsurance products, or increased competition in the
insurance industry; the impact of emerging claim and coverage
issues or the failure of any of the loss limitation methods we
employ; our inability to access cash of our subsidiaries; our
inability to obtain required levels of capital on favourable terms,
if at all; the loss of key employees; our inability to obtain
reinsurance coverage in sufficient amounts, at reasonable prices or
on terms that adequately protect us; the passage of legislation
subjecting our businesses to additional adverse requirements,
supervision or regulation, including additional tax regulation, in
the United States, Canada or other jurisdictions in which we
operate; risks associated with government investigations of, and
litigation and negative publicity related to, insurance industry
practice or any other conduct; risks associated with political and
other developments in foreign jurisdictions in which we operate;
risks associated with legal or regulatory proceedings or
significant litigation; failures or security breaches of our
computer and data processing systems; the influence exercisable by
our significant shareholder; adverse fluctuations in foreign
currency exchange rates; our dependence on independent brokers over
whom we exercise little control; impairment of the carrying value
of our goodwill, indefinite-lived intangible assets or investments
in associates; our failure to realize deferred income tax assets;
technological or other change which adversely impacts demand, or
the premiums payable, for the insurance coverages we offer;
disruptions of our information technology systems; assessments and
shared market mechanisms which may adversely affect our insurance
subsidiaries; and adverse consequences to our business, our
investments and our personnel resulting from or related to the
COVID-19 pandemic. Additional risks and uncertainties are described
in our most recently issued Annual Report which is available at
www.fairfax.ca and in our Base Shelf Prospectus (under “Risk
Factors”) filed with the securities regulatory authorities in
Canada, which is available on SEDAR at www.sedar.com. Fairfax
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
applicable securities law.
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