F&G Annuities & Life, Inc. — Form 8-K Summary
Reporting date: November 22, 2022. The filing reports entry into a material definitive agreement and creation of a direct financial obligation.
Business Context and Transaction
F&G entered into a Credit Agreement with Bank of America, N.A. as administrative agent and issuing bank, and a syndicate of lenders. The agreement provides an unsecured revolving credit facility of up to $550 million for working capital and general corporate purposes. Certain F&G subsidiaries, including Fidelity & Guaranty Life Insurance Company, are guarantors.
Financial Terms and Covenants
- Revolving loans bear interest at either a base rate plus a margin of 30 to 80 basis points or Term SOFR plus a margin of 130 to 180 basis points, depending on F&G’s senior unsecured debt ratings.
- Based on current ratings of BBB- from S&P, Ba1 from Moody’s and BBB- from Fitch, the applicable Term SOFR margin is 165 basis points.
- A quarterly facility fee of 20 to 45 basis points applies to the entire commitment.
- F&G must maintain a maximum consolidated total debt-to-total capitalization ratio of 35%.
- F&G must maintain minimum net worth based on 70% of net worth as of September 30, 2022, plus specified amounts related to subsequent net income and capital stock issuances.
- Under specified rating circumstances, Fidelity & Guaranty Life Insurance Company must maintain a minimum risk-based capital ratio of 300%, calculated as one-half of Total Adjusted Capital divided by Authorized Control Level Risk-Based Capital.
- The agreement contains customary restrictions on liens, additional indebtedness, investments, dispositions, affiliate transactions, dividends and other restricted payments.
Material Changes, Outlook and Risks
This filing does not provide revenue, profit, cash flow, margin, debt-balance, liquidity-utilization or other operating results for a comparable prior period. It discloses the establishment of additional borrowing capacity, but does not state how much of the $550 million facility was drawn at closing.
Events of default may result in increased interest, acceleration of outstanding obligations and termination of lender commitments. Insolvency or bankruptcy-related defaults may trigger automatic acceleration and termination. Compliance with the financial covenants and the insurance subsidiary’s risk-based capital requirements could limit dividends, investments and other corporate actions.
No separate management earnings guidance or broader business outlook is included in the filing.
Key Facts to Verify
- Actual amount drawn under the revolving facility and related outstanding debt.
- Current borrowing costs, including the applicable Term SOFR spread and facility fee.
- F&G’s compliance with the 35% debt-to-capitalization and minimum net worth covenants.
- Fidelity & Guaranty Life Insurance Company’s risk-based capital ratio and whether the rating-contingent test applies.
- Any subsequent amendments, borrowings, defaults, waivers or covenant impacts.
- The complete rights and obligations in Exhibit 10.1, the executed Credit Agreement.