Pricing Term Sheet
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Filed pursuant to Rule 433 | |
dated as of April 23, 2009
|
Registration File No. 333-142462 | |
Supplementing the Preliminary | ||
Prospectus Supplement | ||
dated April 22, 2009 |
Issuer: |
Old Republic International Corporation, a Delaware corporation. | |
Ticker / Exchange for Common Stock: |
ORI / The New York Stock Exchange (NYSE). | |
Trade Date: |
April 23, 2009. | |
Settlement Date: |
April 29, 2009. | |
Notes: |
8.00% Convertible Senior Notes due 2012. | |
Aggregate Principal Amount Offered: |
$275 million aggregate principal amount of Notes (excluding the underwriters option to purchase up to $41.25 million of additional aggregate principal amount of Notes to cover overallotments, if any). | |
Public Offering Price: |
$1,000.0 per Note / $275 million total. | |
Underwriting Discounts: |
$27.5 per Note / $7.6 million total. | |
Proceeds, Before Expenses, to the Issuer: |
$972.5 per Note / $267.4 million total. | |
Maturity: |
The Notes will mature on May 15, 2012, subject to earlier repurchase or conversion. | |
Annual Interest Rate: |
8.00% per annum. | |
Interest Payment and Record Dates: |
Interest will accrue from April 29, 2009, and will be payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2009, to the person in whose name a Note is registered at the close of business on May 1 or November 1, as the case may be, immediately preceding the relevant interest payment date. |
NYSE Last Reported Sale
Price on April 23, 2009: |
$9.60 per share of the Issuers common stock. | |
Conversion Premium: |
20.0% above the NYSE Last Reported Sale Price on April 23, 2009. | |
Initial Conversion Price: |
Approximately $11.52 per share of the Issuers common stock. | |
Initial Conversion Rate: |
86.8056 shares of the Issuers common stock per $1,000 principal amount of Notes. | |
Use of Proceeds: |
The Issuer estimates that the proceeds from this offering will be approximately $267.4 million ($307.6 million if the underwriters exercise their option to purchase additional Notes in full), after deducting underwriting fees and discounts and before estimated expenses. The Issuer intends to use approximately $112.5 million and $30.0 million of the net proceeds of the offering to increase the capital of the general and title insurance business segments, respectively, in order to support future growth opportunities. The Issuer also plans to use approximately $100.0 million to repay commercial paper with maturities ranging from 30 to 90 days that as of April 23, 2009, carried interest rates ranging from 1.5% to 3.1%. The Issuer expects to use the remaining net proceeds for general corporate purposes. Pending application for the foregoing purposes, the net proceeds from this offering will be invested in short-term interest bearing instruments or other investment grade securities. | |
Commissions and Discounts: |
The underwriters have advised the Issuer that they propose initially to offer the Notes at a price of 100% of the principal amount of Notes, plus accrued interest from the original issue date of the Notes, if any, and to dealers at a price less a concession not in excess of 1.65% of the principal amount of the Notes, plus accrued interest from the original issue date of the Notes, if any. | |
The following table shows the public offering price, underwriting discount and proceeds before expenses (which expenses, not including the underwriting discount, are estimated to be $560,000 and are payable by the Issuer) to the Issuer. The information assumes either no exercise or full exercise by the underwriters of their overallotment option. | ||
Per Note | Without Option | With Option | ||||||||||
Public offering price |
$ | 1,000.0 | $ | 275,000,000 | $ | 316,250,000 | ||||||
Underwriting discount |
$ | 27.5 | $ | 7,562,500 | $ | 8,696,875 | ||||||
Proceeds, before expenses, to the Issuer |
$ | 972.5 | $ | 267,437,500 | $ | 307,553,125 |
Joint Book-Running Managers: |
Merrill Lynch, Pierce, Fenner & Smith Incorporated (55%) and J.P. Morgan Securities Inc. (30%) | |
Co-Manager: |
Fox-Pitt Kelton Cochran Caronia Waller (USA) LLC (3.75%), Keefe, Bruyette & Woods, Inc. (3.75%), KeyBanc Capital Markets Inc. (3.75%) and Raymond James & Associates, Inc. (3.75%) |
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CUSIP Number: |
680223 AF1 | |
Adjustment to Shares Delivered Upon Conversion Upon | ||
a Make-whole Fundamental Change: | The following table sets forth the number of additional shares to be added to the conversion rate per $1,000 principal amount of Notes for each stock price and effective date set forth below: |
Stock Price | ||||||||||||||||||||||||||||||||||||||||||||
Effective Date | $9.60 | $10.00 | $12.50 | $15.00 | $20.00 | $25.00 | $30.00 | $35.00 | $40.00 | $45.00 | $50.00 | |||||||||||||||||||||||||||||||||
April 29, 2009 |
17.3610 | 14.6694 | 6.0104 | 3.7392 | 2.5978 | 2.0941 | 1.7603 | 1.5210 | 1.3407 | 1.1997 | 1.0865 | |||||||||||||||||||||||||||||||||
May 15, 2010 |
17.3610 | 14.4800 | 4.7279 | 2.5795 | 1.7682 | 1.4200 | 1.1883 | 1.0222 | 0.8972 | 0.8000 | 0.7217 | |||||||||||||||||||||||||||||||||
May 15, 2011 |
17.3610 | 13.2255 | 2.7321 | 1.2881 | 0.9360 | 0.7555 | 0.6364 | 0.5509 | 0.4865 | 0.4357 | 0.3954 | |||||||||||||||||||||||||||||||||
May 15, 2012 |
17.3610 | 13.1944 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
| If the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year. | |
| If the stock price is greater than $50.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate. | |
| If the stock price is less than $9.60 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate. |
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