HERITAGE INSURANCE HOLDINGS,INC. (NYSE:HRTG) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement |
Indenture
On December13, 2016, Heritage Insurance Holdings, Inc. (the
Company) announced the private placement (the Private
Placement) of the Companys Senior Secured Notes due 2023 (the
Notes). The Notes were issued to an indenture (the
Indenture), dated December15, 2016, among the Company, The
Bank of New York Mellon, as trustee and collateral agent, The
Bank of New York Mellon, London Branch, as paying agent, and The
Bank of New York Mellon (Luxembourg) S.A., as registrar. The
Notes were sold to a number of private investors (collectively,
the Investors) to a purchase agreement, dated December12,
2016. On December16, 2016, the Company announced the closing (the
Closing) of the Private Placement.
The Notes bear interest at a rate per annum equal to the three
month LIBOR rate (but not less than 0.05 percent) plus
8.75percent, with interest payable quarterly in arrears in cash
on the 15th day of each
March, June, September and December of each year, beginning on
March15, 2017. The Notes will mature on December15, 2023.
The Company, at its option, may redeem all, or a portion of, the
Notes (i)at any time after December15, 2018 at a price in cash
equal to 103%, of the principal amount thereof, plus accrued and
unpaid interest, if any, (ii)at any time after December15, 2019
at a price in cash equal to 102% of the principal amount thereof,
plus accrued and unpaid interest, if any, (iii)at any time after
December15, 2020 at a price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if
any, and (iv)at any time after December15, 2021 at a price in
cash equal to 50% of the principal amount thereof, plus accrued
and unpaid interest, if any.
If the Company experiences certain change of control events, the
holders of the Notes will have the right to require the Company
to purchase all or a portion of their Notes at a price in cash
equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any.
The Notes are secured with a continuing perfected priority
security interest in substantially all of the Companys assets,
with certain exceptions including the capital stock of any of its
insurance subsidiaries.
The Indenture includes customary events of default. It also
contains covenants that, among other things, (i)restrict the
ability of the Company and its subsidiaries to incur indebtedness
or make restricted payments under certain circumstances,
(ii)limit the Company and its subsidiaries from creating,
incurring or assuming liens other than permitted liens that
secure any indebtedness on any asset or property of the Company
or its subsidiaries, (iii)require the Company to maintain certain
levels of reinsurance coverage during the life of the Notes, and
(iv)maintain certain financial covenants.
The foregoing description of the Indenture is qualified in its
entirety by reference to the Indenture, which is attached hereto
as Exhibit 4.1 and incorporated herein by reference.
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant |
The information contained in Item 1.01 of this Current Report on
Form 8-K is incorporated herein by reference.
| Item7.01 | Regulation FD Disclosure. |
On December13, 2016, the Company issued a press release
announcing the Private Placement, which is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
On December16, 2016, the Company issued a press release
announcing the Closing, which is attached hereto as Exhibit 99.2
and incorporated herein by reference.
The information in this Item 7.01 is being furnished and shall
not be deemed to be filed for the purposes of Section18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
or incorporated by reference in any filing under the Securities
Act or the Exchange Act, except as shall be expressly set forth
by specific reference in such a filing.
| Item9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits: |
|
ExhibitNo. |
Description |
|
| 4.1 |
Indenture, dated December15, 2016, by and among the Company, The Bank of New York Mellon, a New York banking corporation, as trustee, The Bank of New York Mellon, London Branch, as paying agent, and The Bank of New York Mellon (Luxembourg) S.A., as registrar. |
|
| 99.1 | Press Release dated December13, 2016. | |
| 99.2 | Press Release dated December16, 2016. |
About HERITAGE INSURANCE HOLDINGS, INC. (NYSE:HRTG)
Heritage Insurance Holdings, Inc. is a property and casualty insurance holding company. The Company provides personal and commercial residential insurance. Through its subsidiary, Heritage Property & Casualty Insurance Company, it provides personal residential insurance for single-family homeowners and condominium owners, rental property insurance and commercial residential insurance in the state of Florida and North Carolina. The Company is vertically integrated and controls or manages all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. Its primary products are personal and commercial residential insurance, which it offers only in Florida. It markets and writes personal lines voluntary policies through a network of approximately 1,400 independent agents. It has over 40,130 voluntary policies. It markets and writes commercial residential voluntary policies through a network of over 60 independent agents. HERITAGE INSURANCE HOLDINGS, INC. (NYSE:HRTG) Recent Trading Information
HERITAGE INSURANCE HOLDINGS, INC. (NYSE:HRTG) closed its last trading session down -0.17 at 15.49 with 352,993 shares trading hands.
