Last week we opportunistically secured access to $750 million of contingent capital which will support our growth and financial strength well into the future.
We took advantage of favorable economic conditions to structure this unique source of capital, which we can draw down and pay back at our discretion over the next 30 years. This represents capital that will continue to fuel our mission of serving 2 million delighted customers by 2030.
We are only the 7th life insurer to structure one of these facilities. Past issuers have included Prudential, Lincoln Financial and Mass Mutual.
The success of this transaction continues to point to the strength and stability of our company, the effectiveness of our strategy, and the brightness of our future. This is validation of all of our hard work.
See the details in the full press release below.
NLV Financial Corporation Announces Private Offering of Pre-Capitalized Trust Securities
Montpelier, VT – (October 18, 2021) NLV Financial Corporation (“NLV Financial”), the intermediate holding company for National Life Group and parent company of National Life Insurance Company (“NLIC”), today announced the creation of a new Delaware trust, Maple Grove Funding Trust I (the “Trust”), which has issued $750 million of Pre-Capitalized Trust Securities (“P-Caps”) which are rated “BBB+” by S&P Global Ratings and “Baa1” by Moody’s Investors Service, Inc. (“Moody’s”).
“This contingent capital structure provides National Life Group with financial flexibility in all market environments,” states Eric Sandberg, CFO and CRO of National Life Group, who adds that “this issuance enhances our already strong capital position and allows us to access funds as needed to support our growth.”
“The purpose of this offering is simple,” said Mehran Assadi, Chairman, President and CEO of National Life Group. “It will help us to continue to bring peace of mind to Middle America, the most underserved segment of the market.”
Credit Suisse acted as the sole Structuring Advisor and Bookrunner for the offering. The proceeds from the issuance will be invested by the Trust in a portfolio of principal and interest strips of U.S. Treasuries (“Eligible Assets”). The Trust has entered into a facility agreement with NLV Financial that gives NLV Financial the right to deliver its 4.161% Senior Notes maturing on August 15, 2051 (“Senior Notes”) to the Trust in exchange for Eligible Assets. If NLV Financial exchanges Senior Notes for Eligible Assets, the senior debt would rank pari-passu in right of payment to NLV Financial’s existing and future senior indebtedness.
NLIC was recognized earlier this year with financial strength ratings upgrades to A1 (Good) by Moody’s and A+ (Superior) by A.M Best Rating Services, Inc.*
* Financial strength ratings for National Life Insurance Company and Life Insurance Company of the Southwest as of 10/14/2021 are:
A.M. Best A+ (Superior) 2nd out of 16 ratings
Standard & Poor’s A+ (Strong) 5th out of 21 ratings
Moody’s A1 (Good) 5th out of 21 ratings
Ratings are subject to change