F&G Annuities and Life, Inc., has announced the closing of a $250 million preferred stock investment from parent Fidelity National Financial, Inc. (FNF), with F&G set to use net proceeds from the investment to support the growth of its insurance company subsidiaries.
The terms of the agreement state that FNF has agreed to invest $250 million in exchange for 5,000,000 shares of F&G’s 6.875% Series A Mandatory Convertible Preferred Stock, par value $0.001 per share.
From what we understand, each share of Mandatory Convertible Preferred Stock will have a liquidation preference of $50.00 per share.
An important factor to note, is that unless earlier converted at the option of the holder, each outstanding share of the Mandatory Convertible Preferred Stock will automatically convert into shares of common stock of F&G on January 15, 2027.
However, upon conversion on the Mandatory Conversion Date, the conversion rate for each share of the Mandatory Convertible Preferred Stock will be no more than 1.1111 shares of common stock and no less than 0.9456 shares of common stock per share of Mandatory Convertible Preferred Stock, depending on the overall value of F&G’s common stock.
Moreover, both the offer and sale of the foregoing securities were made in a private placement pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended and/or Rule 506(b) of Regulation D promulgated thereunder.
In addition, the agreement between the two firms was negotiated pursuant to market terms and pricing by a Special Committee of F&G’s Board of Directors, which was comprised of independent members of the Board, in consultation with Barclays serving as independent financial advisor.
Sullivan & Cromwell LLP also served as independent legal counsel.
