As previously disclosed, on June 24, 2019, Horace Mann Educators Corporation (Company), as borrower, replaced its current line of credit with a new five-year Credit Agreement (Credit Agreement). The new Credit Agreement increased the amount available on this senior revolving credit facility to $225 million from $150 million. PNC Capital Markets, LLC and JPMorgan Chase Bank, N.A. served as joint leads on the new agreement, with The Northern Trust Company, U.S. Bank National Association, KeyBank National Association, Comerica Bank and Illinois National Bank participating in the syndicate. Terms and conditions of the new Credit Agreement are substantially consistent with the prior agreement, with an interest rate based on LIBOR plus 115 basis points. The Company utilized the senior revolving credit facility to partially fund the acquisition of National Teachers Associates Life Insurance Company (NTA). Moving forward, the Company will use the senior revolving credit facility for ongoing working capital, capital expenditures and general corporate expenditures.
As described in Item 8.01 below, on July 1, 2019, the Company completed its acquisition of NTA. To fund a portion of the purchase price, the Company utilized $180 million from its senior revolving credit facility as of July 3, 2019. The Company expects to reduce the amount outstanding under the senior revolving credit facility in the coming days as NTA and its subsidiaries are expected to make an approved distribution to the Company. By year-end 2019, the Company expects to have $135 million outstanding under the senior revolving credit facility, with a debt-to-capital ratio below 25% and RBC ratios at each of its insurance subsidiaries at 425% or greater.
The Company issued a news release announcing on July 1, 2019, that it completed the acquisition of all the equity interests in NTA to a Purchase Agreement (Agreement) dated as of December 10, 2018, by and among the Company and Ellard Family Holdings, Inc., Brian M. Ellard and The JCE Exempt Trust. The stated purchase price of the transaction was $405 million plus an additional $20 million (approximately) representing NTA’s share of “adjusted earnings” (as determined in accordance with the terms of the Agreement) from July 1, 2018 to July 1, 2019. As a result of the acquisition, NTA became a wholly owned subsidiary of the Company. A copy of the news release is filed as Exhibit 99.2 to this report.
The information set forth in Item 2.03 is incorporated herein by reference.
Exhibit 99.1 Glossary of Selected Terms.
Exhibit 99.2 Horace Mann Educators Corporation news release dated July 1, 2019.
Forward-looking Information
Statements included in the accompanying news release that state Horace Mann Educators Corporation\’s (Company) or its management\’s intentions, hopes, beliefs, expectations or predictions of future events or the Company\’s future financial performance are forward-looking statements and involve known and unknown risks, uncertainties and other factors. The Company is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. It is important to note that the Company\’s actual results could differ materially from those projected in such forward-looking statements. Please refer to the Company\’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 and the Company\’s past and future filings and reports filed with the Securities and Exchange Commission for information concerning the important factors that could cause actual results to differ materially from those in forward-looking statements.
HORACE MANN EDUCATORS CORP /DE/ ExhibitEX-99.1 2 exhibit991glossaryofselect.htm EXHIBIT 99.1 Exhibit Exhibit 99.1Glossary of Selected Terms The following measures are used by the Company’s management to evaluate performance against historical results and establish targets on a consolidated basis. A number of these measures are components of net income or the balance sheet but,…
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About HORACE MANN EDUCATORS CORPORATION (NYSE:HMN)
Horace Mann Educators Corporation (HMEC) is an insurance holding company. Through its subsidiaries, HMEC markets and underwrites personal lines of property and casualty (primarily personal lines automobile and homeowners) insurance, retirement annuities (primarily tax-qualified products) and life insurance in the United States. The Company’s operating segments include Property and Casualty, Annuity, Life, and corporate and other. The Property and Casualty Segment offers private passenger automobile insurance. The Annuity Segment markets both fixed and variable annuity contracts, primarily on a tax-qualified basis. The Life Segment offers traditional term and whole life insurance products. The Company also markets its products primarily to K-12 teachers, administrators and other employees of public schools and their families. It markets and services its products through a sales force of full-time agents supported by the Company’s Customer Contact Center.
