NU Online News Service, Dec. 1, 2004, 11:44 a.m. EST
A major seller of equity-indexed annuities plans to raise more than $175 million on Wall Street.[@@]
American Equity Investment Life Holding Company, West Des Moines, Iowa, says it intends to issue at least $175 million in contingent convertible notes Dec. 6.
The size of the offering already has increased from $125 million, and one initial purchaser has an option to buy up to $75 million in additional notes, American Equity says.
American Equity says it will be using the proceeds from the offering to support future product sales by increasing the capital and surplus levels at its life insurance subsidiaries.
The notes, which will pay an interest rate of 5.25% per year and mature Dec. 6, 2024, can be redeemed by American Equity after Dec. 15, 2011. In addition to the regular rate of interest, the notes might pay an extra 0.50% of annual interest starting in 2012. Whether notes will pay the extra “contingent” interest will depend on the notes’ trading price, American Equity says.
Note holders can ask American Equity to buy back some or all of the notes on certain dates in 2011, 2014 and 2019.
Holders who decide they would prefer to own stock can convert the notes into a combination of cash and common stock at an initial conversion price of $14.47.