#United States #Senior Notes #Cincinnati #Constellation Insurance #AuguStar Life

AuguStar Life Insurance Company Adjusts Terms for Senior Notes Tender Offer

AuguStar Life Insurance Company (ALIC), a subsidiary of Constellation Insurance Inc. (CII), has revealed the early results of its cash tender offer for the outstanding senior notes of CII. The offer includes the 5.550% senior notes set to mature in 2030, currently bearing an interest rate of 6.800%, and the 6.625% senior notes due in 2031. This announcement marks a pivotal moment for the company, particularly as it seeks to enhance liquidity and manage debt effectively.

Key Highlights of the Tender Offer

As of the early deadline, which was 5 p.m. ET on August 25, 2025, ALIC provided the following significant updates:

• - The maximum principal amount under the tender offer is $250 million.
• - ALIC has removed previous series caps: the $175 million cap for the 2030 notes and the $75 million cap for the 2031 notes. This change is meaningful for investors, allowing greater flexibility in the amount of notes that can be tendered.
• - The firm clarified the order of priority for accepting tenders, which ranks the 2031 notes higher than the 2030 notes.

Tender Offer Details

For notes validly tendered by the early deadline, ALIC will pay:

• - 2031 Notes: $935 for each $1,000 principal amount, plus a $50 premium, leading to a total consideration of $985.
• - 2030 Notes: $950 for each $1,000 principal amount, also including a $50 premium, culminating in a total consideration of $1,000.

The adjustment to the offer is not merely theoretical; as of the announced deadline, significant amounts have already been tendered:

• - $65.3 million of the 2031 Notes and $100.4 million of the 2030 Notes were validly accepted.

Extension and Future Steps

In addition to the adjustments, ALIC has extended the time frame for holders to tender notes until 5 p.m. ET on September 10, 2025. This extension provides additional opportunities for noteholders to participate in the offer before the expiration period.

The tender will also incur proration concerning the notes that are tendered after the early deadline, based on their acceptance priority:

• - 2031 Notes carry the highest acceptance priority (Level 1).
• - 2030 Notes are categorized under acceptance priority Level 2.

Future Expectations and Market Impact

The changes announced aim not only to enhance liquidity for Constellation Insurance but position the company favorably in the market amid evolving interest rates and economic conditions. The modifications in the tender offer represent ALIC’s responsive approach to market demands, encouraging stakeholder participation and mitigating risks associated with debt servicing.

Alongside these tender details, ALIC has engaged BMO Capital Markets Corp. and Truist Securities, Inc. to manage the offerings. Investors and noteholders are advised to consult the official Offer to Purchase for comprehensive details and terms guiding this tender offer.

With the altered terms and extensions, ALIC hopes to navigate the complexities of the current economic landscape effectively, ensuring that they remain competitive in the financial sector by managing their obligations strategically.