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Federated National Holding to sell $25M in senior notes to fund JV buyout

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Federated National Holding to sell $25M in senior notes to fund JV buyout

Federated National Holding Co. has entered into a note purchase agreement to sell $25 million of senior unsecured floating-rate notes in a private placement offering.

The company intends to use the net proceeds for the previously announced purchase of interests in Monarch Delaware Holdings LLC held by Federated National's joint venture partners and to repay the related $5 million in debt, as well as to repurchase shares of the company’s common stock and for general corporate purposes, including managing the capital needs of its subsidiaries.

The notes will have a 10-year maturity and will bear interest, payable quarterly, at 7% above three-month London Interbank Offered Rate, while principal will be payable in full at maturity. The notes may be redeemed in whole or in part at 102% in the first two years, at 101% in years three through five, and at par after year five.

The closing of the offering is expected to occur by Dec. 31, subject to the satisfaction of customary closing conditions.