Kemper Corporation (NYSE:KMPR) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On June8, 2018 (the “Effective Date”), Kemper Corporation (“Kemper”) executed a Second Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”), by and among Kemper, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and syndication agent, and Bank of America, N.A. and Wells Fargo Bank, National Association, as syndication agents. J.P. Morgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner& Smith, Incorporated and Wells Fargo Securities, LLC served as joint bookrunners and joint lead arrangers. The Amended and Restated Credit Agreement, a $300million, five-year revolving credit facility and a $250million, two year delayed-draw term loan facility, is an amendment and restatement of Kemper’s existing $225million five-year credit facility that was effective June2, 2015 and set to expire on June2, 2020 (the “Original Agreement”). The final maturity date of the revolving credit facility under the Amended and Restated Credit Agreement is June8, 2023. The latest final maturity date of the delayed-draw term loan facility under the Amended and Restated Credit Agreement is December5, 2020; provided that such final maturity date could be accelerated to an earlier date depending on when the term loans are borrowed and when the Infinity Acquisition (as defined in the Amended and Restated Credit Agreement) is consummated. The consummation of the Infinity Acquisition remains subject to the fulfillment or waiver of certain closing conditions, including receipt of regulatory clearances and approvals.
The Amended and Restated Credit Agreement includes an accordion provision under which Kemper may request increases to expand the revolving credit facility and/or delayed-draw term loan facility, by up to an aggregate shared maximum amount of $100million during the term of either the revolving credit facility or delayed-draw term loan facility. Proceeds under the Amended and Restated Credit Agreement can be used for general corporate purposes, including to fund a portion of the cash consideration to be paid in connection with the Infinity Acquisition. On the Effective Date, no borrowings were outstanding under the Original Agreement or the Amended and Restated Credit Agreement.
The Amended and Restated Credit Agreement contains covenants generally consistent with those in the Original Agreement, with revisions to several covenants, and various other provisions, including the following changes (capitalized terms used below are defined in the Amended and Restated Credit Agreement):
|•||Addition of a $250million, two year delayed-draw term loan facility;|
|•||Added acquired debt to permitted subsidiary indebtedness and expanded subsidiary debt capacity to 12.5% of consolidated net worth from $100million;|
|•||Cross default threshold for defaults in other material indebtedness was increased to $150million from $100million and the default threshold for judgments was increased to $150million from $100million;|
|•||Permitted indebtedness owed to Federal Home Loan Bank borrowings, to the extent used solely to provide operating leverage in connection with the Company’s collateralized investment borrowings, is now unlimited and, to the extent such borrowings are used otherwise, is limited to a cap of $500million; and|
|•||Availability of borrowings under the revolving credit facility that are denominated in Euro, PoundSterling or Canadian Dollars is no longer limited to a cap of $30million.|
Some of the lenders under the Amended and Restated Credit Agreement and their respective affiliates have various relationships with Kemper to provide commercial banking, trust services, investment banking, underwriting and other financial services, for which they have and will receive customary fees and expenses.
The foregoing description of the Amended and Restated Credit Agreement is a summary and is qualified in its entirety by reference to the complete terms of the Amended and Restated Credit Agreement, which is incorporated herein by reference to Exhibit 10.1 of this Report on Form 8-K. Capitalized terms not defined herein shall have the meanings set forth in the Amended and Restated Credit Agreement. Representations and warranties made by and between the parties to the Amended and Restated Credit Agreement are intended solely for the benefit of the parties thereto; accordingly, investors should not rely upon such representations and warranties.
On June12, 2018, Kemper issued a press release announcing the execution of the Amended and Restated Credit Agreement. A copy of the press release is filed herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 1.01.Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained above under “Item 1.01, Entry into a Material Definitive Agreement” is hereby incorporated by reference.
Item 1.01.Financial Statements and Exhibits.
KEMPER Corp ExhibitEX-10.1 2 d600466dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION VERSION SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 8,…To view the full exhibit click
About Kemper Corporation (NYSE:KMPR)
Kemper Corporation is a diversified insurance holding company. The Company, through the subsidiaries, provides automobile, homeowners, life, health and other insurance products to individuals and businesses. The Company, through its subsidiaries, is engaged in the property and casualty insurance and life and health insurance businesses. The Company operates in two segments: Property & Casualty Insurance, and Life & Health Insurance. Its Property & Casualty Insurance segment’s products include personal automobile insurance, both standard and non-standard risks, homeowners insurance, other personal insurance and commercial automobile insurance. Its Property & Casualty Insurance segment distributes its products through independent agents and brokers. Its Life & Health Insurance segment’s products include individual life, accident, health and property insurance. Its Kemper Home Service companies focus on providing individual life and supplemental accident and health insurance products.