Banner Life Insurance Company Completes Second Capital Markets Financing of Regulation XXX Reserve Requirements with a $450 Million Offering by Wholly-Owned Subsidiary First British American Reinsurance Company II.ROCKVILLE, Md. -- Banner Life Insurance Company ("Banner Life"), the principal operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of Legal & General America and a member of Legal & General Group Plc, announced today the closing of a $450 million capital markets offering underwritten by Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. Inc. The transaction allows First British American British Americans are Americans whose ancestry stems, either wholly or in part, from one of the four constituent nations of the United Kingdom. The term is seldom used by people to refer to themselves (less than 1% chose it in the 2000 census), and is used primarily as a Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Company II ("FBARC II") to provide reserve credit to its parent company, Banner Life, for Regulation XXX reserve requirements Reserve Requirements Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank. on a block of fully underwritten level premium term life insurance business. David Lenaburg, Chief Executive Officer of Legal & General America said, "We view these transactions as an important core competency A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Gene Gilbertson, Chief Financial Officer of Legal & General America said, "With the execution of our first capital markets financing in 2004, Banner Life became one of the first insurance companies to utilize the depth of the capital markets as a regulatory capital management tool. Today, with the closing of our second capital markets financing to address Regulation XXX, we extend the efficiency of this solution to a new block of business and a new group of policyholders. In addition, this transaction has further enabled us to diversify our financial resources within the context of a low cost, non-recourse solution without impacting the Group's credit capacity or leverage ratios." FBARC II, a South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. domiciled special purpose financial captive, established a $500 million facility from which it has raised $450 million of statutory capital to collateralize collateralize To pledge an asset as security for a loan. A loan to a broker is collateralized by pledging securities. reserve credit obligations arising from the reinsurance of the specified block of business from Banner Life. The additional $50 million available under the facility provides capacity to raise statutory capital in the future if actual experience of the reinsured block varies significantly from modeled projections. FBARC II will fund itself via Shenandoah Trust Capital I, a special purpose Delaware trust, which will issue floating rate Shenandoah Trust Capital I Term Securities, Series 2006-1, to the capital markets. The financing covers a portfolio of 10-, 15-, 20- and 30-year term products and has a final maturity in 2037; however, the securities have a flexible amortization profile that will effectively match the run-off of the Regulation XXX reserve requirements over time and can be called without penalty in the event Regulation XXX is ever modified or rescinded. The securities carry a financial guarantee from Assured Guaranty Corp. and are rated AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. from Standard & Poor's and Aa1 with a positive outlook from Moody's. Lehman Brothers acted as sole structuring advisor and sole underwriter on the transaction. Operating for more than 50 years, Banner Life is the flagship of Legal & General Group Plc in the United States and is licensed to sell individual traditional life, universal life and annuity products in every state except New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . At year-end 2005, on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). consolidated basis, Legal & General America had over $273 billion of life insurance in force, over $3.7 billion in assets, and an investment portfolio that consisted of over 99% investment grade assets, including 12% U.S. government and U.S. government agency holdings. On a statutory basis, Banner Life had capital & surplus of nearly $233 million and assets equal to 124% of liabilities. Banner Life is rated "A+" (Superior) from A.M. Best for financial strength and operating performance and has a "AA" (Very Strong) rating from Standard & Poor's for financial strength. For more information, please contact Bryan Newcombe, Vice President and General Counsel for Legal & General America, at (301) 294-6968 or bnewcombe@lgamerica.com. |
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