USI Announces Results and Settlement of Early Tender for Floating Rate Notes Due 2014 and 9.750% Senior Notes Due 2015

  USI Announces Results and Settlement of Early Tender for Floating Rate Notes
  Due 2014 and 9.750% Senior Notes Due 2015

Business Wire

BRIARCLIFF MANOR, N.Y. -- December 27, 2012

USI Holdings Corporation (“USI” or the “Company”) announced today that holders
of approximately $192.6 million aggregate principal amount (representing
approximately 86%) of its Senior Floating Rate Notes due 2014 (the “2014
Notes”) and holders of approximately $115.7 million aggregate principal amount
(representing approximately 66%) of its 9.750% Senior Subordinated Notes due
2015 (the “2015 Notes,” and together with the 2014 Notes, the “Notes”) validly
tendered their Notes prior to the consent payment deadline of 5:00 p.m., New
York City time, on December 14, 2012 and that USI had accepted such tendered
Notes for payment in accordance with the Offer to Purchase and Consent
Solicitation Statement, dated December 3, 2012 (the “Offer to Purchase”).

Those holders who validly tendered their 2014 Notes received an aggregate of
approximately $193.7 million, consisting of the total consideration of
$1,000.47 per $1,000 principal amount of the 2014 Notes, which included a
consent payment of $50.00 per $1,000 principal amount of the 2014 Notes, plus
any accrued and unpaid interest on the 2014 Notes up to, but not including,
the payment date.

Those holders who validly tendered their 2015 Notes received an aggregate of
approximately $119.9 million, consisting of the total consideration of
$1,025.19 per $1,000 principal amount of the 2015 Notes, which included a
consent payment of $50.00 per $1,000 principal amount of the 2015 Notes, plus
any accrued and unpaid interest on the 2015 Notes up to, but not including,
the payment date.

In connection with the tender offer, USI solicited consents (“Consents”) from
the holders of the 2014 Notes and the 2015 Notes to amend the respective
indentures governing the 2014 Notes and the 2015 Notes (the “Amendments”).
Since USI received Consents from greater than a majority in aggregate
principal amount of the outstanding 2014 Notes and 2015 Notes, respectively,
USI, the guarantors thereto and The Bank of New York Mellon, as Trustee (the
“Trustee”), have executed supplemental indentures to the respective indentures
to the respective indentures governing the 2014 Notes and the 2015 Notes,
giving effect to the Amendments, which, among other modifications, eliminate
substantially all of the affirmative and restrictive covenants, restrictions
on the ability of USI to merge, consolidated or sell substantially all of its
properties or assets and eliminate or modify certain events of default and
certain other related provisions contained therein. Following the repurchase
of the Notes described above, USI satisfied and discharged the Indentures
governing the Notes.

Continuing Tender Offer

Holders who validly tender their 2014 Notes or 2015 Notes, as applicable,
after 5:00 p.m., New York City time, on December 14, 2012, but at or prior to
11:59 p.m., New York City time, on December 31, 2012, unless extended or
earlier terminated by the Company in its sole discretion, will receive the
tender offer consideration of $950.47 per $1,000 principal amount of the 2014
Notes and $975.19 per $1,000 principal amount of the 2015 Notes, respectively,
in each case, plus any accrued and unpaid interest up to, but not including,
the final payment date, but will not receive the consent payment noted above.

The complete terms and conditions of the continuing tender offer are set out
in the Offer to Purchase. The holders of 2014 Notes and 2015 Notes (as
applicable) may obtain copies of all the tender offer documents, including the
Offer to Purchase, free of charge by directing a request to D.F. King & Co.,
Inc., the Information Agent for the Offer, at 48 Wall Street, New York, New
York 10005 and by telephone (212) 269-5550, for banks and brokers, or (800)
290-6426 for others. The Company has engaged Morgan Stanley & Co. LLC as
Dealer Manager for the tender offer. Persons with questions regarding the
tender offer should contact Morgan Stanley & Co. LLC at (212) 761-1057 (Call
Collect) or (800) 624-1808 (Toll Free).

Conditional Redemption

On November 30, 2012, the Company sent a conditional notice of redemption (the
“Conditional Notice of Redemption”) to redeem any and all outstanding Notes on
December 31, 2012 (the “Redemption Date”), subject to the terms and conditions
set forth in the indentures governing the 2014 Notes and the 2015 Notes,
respectively, at a redemption price for the 2014 Senior Notes of 100.000% of
the principal amount thereof and for the 2015 Subordinated Notes of 102.438%
of the principal amount thereof, plus, in each case, accrued and unpaid
interest on the Notes redeemed to, but not including, the Redemption Date.
Those Notes which were not validly tendered according to the terms of the
tender offer are expected to be redeemed on December 31, 2012. The Redemption
Condition (as defined in the Conditional Notice of Redemption) has been
satisfied.

This press release does not constitute an offer to purchase or the
solicitation of an offer to sell the 2014 Notes or the 2015 Notes or any other
securities or a solicitation of Consents. The tender offer is made only by and
pursuant to the terms of the Offer to Purchase, and the redemption is made
only by and pursuant to the terms of the Conditional Notice of Redemption and
indentures. Holders of the 2014 Notes or the 2015 Notes must make their own
decisions as to whether to tender their 2014 Notes or 2015 Notes and deliver
their Consents, and, if they decide to do so, the principal amount of 2014
Notes or 2015 Notes to tender.

About USI Insurance Services

Founded in 1994, USI is the 9th largest insurance broker in the United States
and the 13th largest in the world. USI is headquartered in Briarcliff Manor,
NY, and operates out of approximately 100 offices across the United States.
Additional information about USI may be found at www.usi.biz.

Forward-Looking Statements

This press release may contain forward-looking statements that are based on
management’s current expectations and are subject to known and unknown
uncertainties and risks, which could cause actual results to differ materially
from those contemplated or implied by such forward-looking statements. USI is
under no obligation to update any forward-looking statements contained herein
should material facts change due to new information, future events or
otherwise.

Contact:

USI Insurance Services
Edward J. Bowler, 914-749-8504
ed.bowler@usi.biz
or
USI Insurance Services
Cecile M. Locurto, 914-747-6331
cecile.locurto@usi.biz
 
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