GAINSCO Inc. (announced that its newly formed and wholly owned subsidiary, GAINSCO Capital Trust I, issued $25 million of 30-year capital securities.
GAINSCO is a Dallas, Texas-based holding company. Its nonstandard personal automobile insurance products are distributed through independent retail agents in Florida (Southeast Region), Texas (South Central Region), Arizona and Nevada (Southwest Region) and California (West Region). Its insurance company subsidiaries are General Agents Insurance Company of America Inc. and MGA Insurance Company Inc.
The capital securities require quarterly payments of interest at a floating interest rate equal to the 3-month LIBOR (London interbank offered rate for U.S. dollar deposits) plus a margin of 3.85 percent. The capital securities will mature on March 31, 2036 and are redeemable at the company’s option beginning after March 31, 2011, in whole or in part, at the liquidation amount of $1,000 per capital security. Payments under the capital securities are guaranteed by the company.
The net proceeds of the offering will be used by GAINSCO Capital Trust I to acquire debt securities of the company that have the same maturity and bear interest at the same rate as the capital securities. The Company will acquire 100 percent of the common securities of GAINSCO Capital Trust I. The company will, in turn, use the proceeds to (i) redeem its outstanding Series A Preferred Stock held by Goff Moore Strategic Partners, L.P. (“GMSP”), and (ii) provide capital to its insurance companies. The balance will be used for general corporate purposes.
The 18,120 shares of Series A Preferred Stock held by GMSP have a redemption value of $18.1 million and are redeemable at the option of GMSP on Jan.1, 2011. These shares became entitled to receive cash dividends of 10 percent per annum beginning January 1, 2006. The Company expects to redeem the Series A Preferred Stock, along with accrued dividends, by the end of the first quarter. GMSP is the beneficial owner of approximately 33 percent of our common stock and John C. Goff, the managing general partner of GMSP, is a member of our board of directors.
Source: GAINSCO Inc.
Was this article valuable?
Here are more articles you may enjoy.
Two Montgomery Workers Charged with Insurance Fraud in Alabama 
Miami Retirement Fund Class Action Alleges Globe Life Officers Concealed Fraud 
Growing Wildfire Risk Leaves States Grappling With How to Keep Insurers From Fleeing 
Insurers Get Green Light to Pay Less Than Billed Charges in Florida PIP Cases 
