FBL Financial Group Closes EquiTrust Life Insurance Company Sale
January 3, 2012 by Warren S. Hersch
January 2, 2012
FBL Financial Group, Inc., West Des Moines, Iowa (NYSE: FFG), has closed the previously announced sale of its subsidiary, EquiTrust Life Insurance Company, to a controlled affiliate of Guggenheim Partners, LLC, New York, N.Y., in an all-cash transaction with initial sale proceeds of $471.4 million.
FBL Financial says the initial sale proceeds of $471.4 million consist of the preliminary purchase price of $440 million increased by $31.4 million for the closing net worth adjustment, calculated as the estimated change in EquiTrust Life’s adjusted statutory net worth for the nine-month period since March 31, 2011. The final price will be determined after the year-end statutory balance sheet is completed for EquiTrust Life and a further post-closing adjusted statutory net worth reconciliation is calculated.
EquiTrust Life sells fixed and indexed annuities and life insurance nationally through independent agents and marketing organizations. Guggenheim Partners, LLC is a diversified financial services firm with more than $125 billion in assets under management. The acquisition of EquiTrust Life includes all of the independent channel business developed since 2003, as well as a closed block of coinsured business.
In conjunction with the closing of the sale of EquiTrust Life, $50 million of FBL Financial Group’s $100 million principal amount of 6.10% Senior Notes due 2015, held solely by affiliates, have been redeemed from Farm Bureau Property & Casualty Insurance Company. Additionally, in accordance with the terms of FBL Financial Group’s 5.85% Senior Notes due 2014 and 5.875% Senior Notes due 2017, a portion of the sale proceeds will be used to redeem this public debt.
FBL Financial says the notes, which have a principal amount outstanding of $175 million, are expected to be redeemed on January 30, 2012, at the make-whole redemption price. The indentures governing these notes have been discharged in conjunction with the closing of the sale of EquiTrust Life.