FPIC Insurance Group Inc., based in Jacksonville, Fla., announced it completed a second $15 million private placement. Sandler O’Neill & Partners, L.P. (Sandler O’Neill) acted as placement agent for the offering. FPIC provides professional liability insurance for physicians, dentists and other healthcare providers, primarily in Florida and Missouri.
On May 13, 2003, FPIC entered into a placement agreement with Sandler O’Neill for the private placement of approximately $5 million of trust preferred securities and $10 million of unsecured senior notes. The offering was completed May 22.
FPIC, through its wholly owned statutory trust, along with other insurance and insurance holding company participants, issued trust preferred securities to the Sandler O’Neill investment pool, which in turn issued its securities to institutional and accredited investors.
The securities issued to the investment pool by FPIC mature in 30 years and will bear a floating per annum interest rate equal to LIBOR plus 4.2 percent, for an initial rate of approximately 5.5 percent. The floating interest rate will be adjustable quarterly with changes in LIBOR, and the maximum rate that may be charged under the securities within the first five years is 12.5 percent.
The floating rate 30-year senior notes will bear a per annum interest rate equal to LIBOR plus 4.2 percent, for an initial rate of approximately 5.5 percent.
The net proceeds from the trust preferred securities and the senior notes are being used primarily to pay down FPIC’s revolving credit facility and to partially unwind a related hedge agreement. FPIC has secured from its bank lender group the necessary approvals and amendments to its credit facility to allow for the issuance of the trust preferred securities and the senior notes and such use of the proceeds.
FPIC estimates it will incur charges of approximately $1 million after tax in the second quarter of 2003 in connection with the completion of the recent FTN Financial Capital Markets/Keefe Bruyette & Woods Inc. and Sandler O’Neill private placements, consisting primarily of the costs to unwind swap agreements associated with the pay downs of its bank debt.
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