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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 5, 2005
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
MISSOURI 1-11848 43-1627032
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification Number)
1370 TIMBERLAKE MANOR PARKWAY, CHESTERFIELD, MISSOURI 63017
(Address of principal executive offices)
Registrant's telephone number, including area code: (636) 736-7000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 5, 2005, Reinsurance Group of America, Incorporated ( the
"Company") entered into an underwriting agreement (the "Underwriting Agreement")
to issue and sell to Morgan Stanley & Co. Incorporated and Lehman Brothers Inc.,
as underwriters, $400 million principal amount of the Company's 6.75% Junior
Subordinated Debentures due 2065 (the "Debentures"). The Debentures were sold at
a price to the public of 99.66% of principal amount, less underwriting discounts
and commissions of 1.00%, resulting in proceeds to the Company of $394.6
million, before offering expenses. The Company agreed with the underwriters not
to offer, sell or otherwise transfer any of its debt securities with a maturity
of three or more years, or any securities convertible or exchangeable into such
debt securities, for a period of 30 days from December 5, 2005. A copy of the
Underwriting Agreement is attached to this report as Exhibit 1.01 and is
incorporated herein by reference. The Debentures were sold under the Company's
Form S-3 (Registration Nos. 333-123161, 333-123161-01 and 333-123161-02). The
Company expects to use the proceeds to repay approximately $100 million of its
7.25% senior notes due 2011 when they mature on April 1, 2006, to purchase
approximately $100 million of its common stock (which the Company expects to
effect through an accelerated share repurchase program with Morgan Stanley & Co.
Incorporated) and for general corporate purposes.
The Debentures were sold pursuant to a second supplemental junior
subordinated indenture dated as of December 8, 2005, supplementing a junior
subordinated indenture, dated as of December 18, 2001 (together, the
"Indenture"), each between the Company and The Bank of New York, as indenture
trustee. The Debentures are junior subordinated unsecured obligations and will
rank junior to the Company's existing senior indebtedness, as defined in the
Indenture, including, without limitation, senior subordinated debt and junior
subordinated debt underlying the existing capital securities of the Company's
affiliated Delaware statutory trust, RGA Capital Trust I, and any other senior
indebtedness that the Company incurs in the future, and will be effectively
subordinated to all indebtedness of RGA's subsidiaries, as provided in the
Indenture.
The Debentures bear interest from the date of issuance on December 8, 2005
to December 15, 2015 (the "Fixed Rate Period") at a fixed rate equal to 6.75%
per year, payable semi-annually in arrears on June 15 and December 15 of each
year, beginning on June 15, 2006, subject to the Company's right to defer
interest payments through an extension of the interest period, as described
below. From December 15, 2015 until stated maturity on December 15, 2065,
interest on the Debentures will accrue at an annual rate of 3-month LIBOR plus a
margin equal to 266.5 basis points, payable quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year, subject to the Company's
right to defer interest payments for up to ten years and other conditions, as
described below.
The Indenture provides that payments of interest are subject to optional
deferral and mandatory deferral provisions. As long as no event of default with
respect to the Debentures or Mandatory Deferral Event (as defined in the
Indenture) has occurred and is continuing, the Company may elect at any time and
from time to time to exercise its right to defer one or more interest payments
on the Debentures. The Indenture also provides that, if and to the extent that a
Mandatory Deferral Event has occurred and is continuing, the Company must defer
payments of interest on the Debentures, except to the extent that interest on
the Debentures is paid through the Alternative Coupon Satisfaction Mechanism (as
defined in the Indenture). Upon optional deferral or mandatory deferral, any
deferred interest will accrue and compound semi-annually or quarterly, as
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applicable, at the from time to time then applicable rate of interest on the
Debentures. An extension period (whether optional, mandatory or any combination
of either) may not (i) exceed ten years, (ii) end on a date other than a
regularly scheduled interest payment date or (iii) extend beyond the stated
maturity of the Debentures. For these purposes, (x) only when all accrued and
unpaid interest, together with any compounded interest thereon, has been paid
will any interest payment period during which interest has been deferred no
longer be included in an extension period; and (y) after the commencement of an
extension period, the period from the first interest payment date for which
interest was deferred and ending on the interest payment date on which all
interest that was deferred is paid in full will be included for purposes of
calculating the length of an extension period.
During the one year period immediately following the occurrence of a
Mandatory Deferral Event the Company may satisfy, and after such period the
Company must (except upon an event of default with respect to the Debentures)
use commercially reasonable efforts, subject to specified market disruption
events (as defined in the Indenture), to satisfy, its obligation to pay interest
on the Debentures by selling shares of its common stock in an amount that will
generate sufficient net proceeds to enable the Company to pay in full all
accrued and unpaid interest, together with any compounded interest (the
"Alternative Coupon Satisfaction Mechanism"). The net proceeds received by the
Company from the issuance of common stock (i) during the 180 days prior to any
interest payment date on which it intends to use the Alternative Coupon
Satisfaction Mechanism and (ii) designated by the Company at or before the time
of such issuance as available to pay interest on the Debentures will, at the
time such proceeds are delivered to the indenture trustee to satisfy the
relevant interest payment, be deemed to satisfy the Company's obligation to pay
interest on the Debentures pursuant to the Alternative Coupon Satisfaction
Mechanism.
During any optional or mandatory extension period and until such time as
all accrued and unpaid interest, together with any compounded interest, is paid
in full, the Company will not, and will not permit any subsidiary to, declare or
pay any dividends or any distributions on, or make any payments of interest,
principal or premium, or any guarantee payments on, or redeem, purchase, acquire
or make a liquidation payment on, any of RGA's capital stock, debt securities
that rank equal or junior to the Debentures or guarantees that rank equal or
junior to the Debentures, other than pro rata payments on securities that rank
equally with the Debentures and except for certain exceptions specified in the
Indenture.
The Debentures are redeemable prior to their maturity in whole or in part,
on or after December 15, 2015, at the Par Redemption Amount (as defined in the
Indenture); provided that if the Debentures are not redeemed in whole, the
Company may not effect such redemption unless at least $50 million aggregate
principal amount of Debentures (excluding any Debentures held by the Company or
its affiliates) remains outstanding after giving effect to such redemption. In
addition the Debentures are redeemable in whole, prior to December 15, 2015, at
a cash redemption price equal to the greater of (i) the Par Redemption Amount
(as defined in the Indenture) and (ii) the Make-Whole Redemption Amount (as
defined in the Indenture). The Company may not redeem fewer than all outstanding
Debentures unless all accrued and unpaid interest, together with any compounded
interest, has been paid in full for all interest payment periods terminating on
or before the redemption date.
In certain events of the Company's bankruptcy, insolvency or receivership
(as specified in the Indenture) prior to the maturity or redemption of any
Debentures, whether voluntary or not, a holder of Debentures will have no claim
for unpaid mandatorily deferred interest (including compounded interest thereon)
to the extent the amount of such interest exceeds 25% of the then outstanding
principal amount of such holder's Debentures.
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The Indenture provides the following events of default with respect to the
Debentures: (i) default for 30 calendar days in the payment of any interest on
the Debentures when such interest becomes due and payable (whether or not such
payment is prohibited by the subordination provisions); however, a default under
this provision will not arise if the Company has properly deferred the interest
in connection with an optional or mandatory extension period, if applicable (in
no event shall any extension period, whether optional, mandatory, or any
combination thereof, exceed ten years); (ii) default in the payment of the
principal of, and premium, if any, on the Debentures when due; or (iii) certain
events of bankruptcy, insolvency, or receivership, whether voluntary or not.
These events of default do not include failure to comply with covenants,
including the Alternative Coupon Satisfaction Mechanism.
If the Company redeems any Debentures prior to their maturity date, the
Company intends to redeem such Debentures only to the extent the aggregate
principal amount of the Debentures called for redemption is equal to or less
than the net proceeds the Company has received during the six months prior to
the date of such redemption from the new issuance of certain qualifying
securities.
"Qualifying securities" means: (i) the Company's capital stock or (ii)
other securities or combinations of securities which, as determined in good
faith by the Company's board of directors, rank equally with or junior to the
Debentures and have a term of comparable duration, comparable deferral features
and replacement intent provisions comparable to those described in the preceding
paragraph, except that if the Company issues securities to any of its
subsidiaries, such securities will be deemed to be qualifying securities only if
such subsidiary receives net proceeds in an equal or greater amount from the
contemporaneous issuance to a person other than the Company or its other
subsidiaries of securities having the characteristics described above, as
determined in good faith by the Company's board of directors.
The foregoing description of the Indenture and the Debentures does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Indenture, including the form of Debentures included therein, copies
of which are attached as Exhibits 4.1, 4.2 and 4.3, respectively, to this
Current Report on Form 8-K and are incorporated herein by reference.
From time to time, certain of the underwriters have provided, and may
provide, various financial advisory or investment banking services to the
Company and its affiliates, for which they have received and may continue to
receive customary fees and commissions. The underwriters may, from time to time,
engage in transactions with or perform services for us in the ordinary course of
business. In addition, the Company expects that Morgan Stanley & Co.
Incorporated will enter into an agreement with us to effect the accelerated
share repurchase program referred to above.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The description of the terms of the Company's offering of $400,000,000 of
its Debentures, the Indenture, the Second Supplemental Indenture and the
Debentures under Item 1.01 above and the Indenture, the Second Supplemental
Indenture and the Debentures attached as Exhibits 4.1, 4.2, and 4.3
respectively, to this Current Report on Form 8-K are each incorporated by
reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
See exhibit index.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REINSURANCE GROUP OF AMERICA,
INCORPORATED
Date: December 9, 2005 By: /s/ Jack B. Lay
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Jack B. Lay
Executive Vice President and Chief Financial
Officer
EXHIBIT INDEX
Exhibit No. Exhibit
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1.1 Underwriting Agreement relating to the Debentures, dated
December 5, 2005 between Reinsurance Group of America,
Incorporated and Morgan Stanley & Co. Incorporated and
Lehman Brothers Inc.
4.1 Junior Subordinated Indenture, dated as of December 18,
2001 between Reinsurance Group of America, Incorporated
and The Bank of New York, as trustee (incorporated by
reference to Exhibit 4.3 to the Registration Statement
on Form S-3 (File Nos. 333-108200, 333-108200-01 and
333-108200-02), previously filed with the Commission on
August 25, 2003)
4.2 Second Supplemental Junior Subordinated Indenture, dated
as of December 8, 2005 between Reinsurance Group of
America, Incorporated and The Bank of New York, as
trustee
4.3 Form of 6.75% Junior Subordinated Debenture due 2065
(included as Exhibit A to Exhibit 4.2 of this current
report)
5.1 Legal Opinion of Bryan Cave LLP
8.1 Tax Opinion of Debevoise & Plimpton LLP
23.1 Consent of Bryan Cave LLP (included in Exhibit 5.1 of
this current report)
23.2 Consent of Debevoise & Plimpton LLP (included in Exhibit
8.1 of this current report)