Farmers Insurance Exchange priced an offering of $400 million of surplus notes.
Interest on the notes will accrue at a fixed annual rate of 4.747% until Nov. 1, 2037, and thereafter at a floating rate equal to three-month U.S. dollar LIBOR plus 3.231% per annum. Farmers Insurance Exchange may redeem some or all of the notes at any time on or after Nov. 1, 2037, at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest, if any.
The notes will mature Nov. 1, 2057.
The company plans to use the net proceeds, together with cash on hand, to repay its 6.15% certificate of contribution due 2021 issued to Zurich American Insurance Co., with an outstanding principal amount of $707 million as of June 30, on Dec. 29.