ACE INA HOLDINGS INC. (a Delaware corporation) Debt Securities Unconditionally Guaranteed as to Payment of
Exhibit 1.2
ACE INA HOLDINGS INC.
(a Delaware corporation)
Debt Securities
Unconditionally Guaranteed as to Payment of
Principal, Premium, if any, and Interest by
ACE LIMITED
TERMS AGREEMENT
May 12, 2008
| To: | ACE INA HOLDINGS INC. |
436 Walnut Street, WB12B
Philadelphia, PA 19106
ACE LIMITED
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM 08, Bermuda
Ladies and Gentlemen:
We understand that ACE INA Holdings Inc., a Delaware company (the “Company”), proposes to issue and sell $450,000,000 aggregate principal amount of its senior debt securities (the “Underwritten Securities”), which will be unconditionally guaranteed as to payment of principal, premium, if any, and interest by ACE Limited, a Cayman Islands company. Subject to the terms and conditions set forth or incorporated by reference herein, the underwriters named below (the “Underwriters”) offer to purchase, severally and not jointly, the principal amount of Underwritten Securities opposite their names set forth below at the purchase price set forth below.
| Underwriter | Percentage | Principal Amount of Underwritten Securities | ||||
| Citigroup Global Markets Inc. | 20.0 | % | $ | 90,000,000 | ||
| J.P. Morgan Securities Inc. | 20.0 | % | $ | 90,000,000 | ||
| Wachovia Capital Markets, LLC | 20.0 | % | $ | 90,000,000 | ||
| Deutsche Bank Securities Inc. | 6.0 | % | $ | 27,000,000 | ||
| Greenwich Capital Markets, Inc. | 6.0 | % | $ | 27,000,000 | ||
| HSBC Securities (USA) Inc. | 6.0 | % | $ | 27,000,000 | ||
| Barclays Capital Inc. | 6.0 | % | $ | 27,000,000 | ||
| Mitsubishi UFJ Securities International plc | 6.0 | % | $ | 27,000,000 | ||
| BNP Paribas Securities Corp. | 1.667 | % | $ | 7,500,000 | ||
| Calyon Securities (USA) Inc. | 1.667 | % | $ | 7,500,000 | ||
| Comerica Securities Inc. | 1.667 | % | $ | 7,500,000 | ||
| ING Financial Markets LLC | 1.667 | % | $ | 7,500,000 | ||
| Lloyds TSB Bank plc | 1.667 | % | $ | 7,500,000 | ||
| NatCity Investments, Inc. | 1.667 | % | $ | 7,500,000 | ||
| Settlement Date (T+5 days): | 100 | % | $ | 450,000,000 | ||
The Underwritten Securities shall have the following terms:
| Title: | 5.600% Senior Notes due 2015 | |
| Rank: | Senior Debt | |
| Ratings: | A3 / A- / A (stable/ stable / stable) | |
| Aggregate principal amount: | $ 450,000,000 | |
| Denominations: | $2,000 and integral multiples of $1,000 in excess of $2,000 | |
| Currency of payment: | United States dollars | |
| Interest rate or formula: | 5.600% per annum | |
| Interest payment dates: | Each May 15 and November 15, commencing November 15, 2008 | |
| Regular record dates: | Each May 1 and November 1 | |
| Stated maturity date: | May 15, 2015 | |
| Redemption provisions: | As disclosed in the Company’s Prospectus Supplement dated May 12, 2008 to Prospectus dated February 7, 2008 | |
| Sinking fund requirements: | None | |
| Conversion or exchange provisions: | None | |
| Listing requirements: | None | |
| Black-out provisions: | None | |
| Fixed or Variable Price Offering: | Fixed Price Offering | |
| Initial public offering price: | 99.647% of the principal amount, plus accrued interest, if any, from May 19, 2008. | |
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| Purchase price: | 99.022% of principal amount. | |
| Form: | Global certificate representing the Underwritten Securities registered in the name of Cede & Co., as nominee of The Depository Trust Company. | |
| Applicable Time: | 8 P.M. | |
| Other terms and conditions: | The Underwritten Securities will be issued under an indenture dated as of August 1, 1999, among the Company, the Guarantor and The Bank of New York Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association and The First National Bank of Chicago), as trustee (the “Senior Indenture”). All references in the Underwriting Agreement (as defined below) to the “applicable Indenture” shall be deemed to refer to the Senior Indenture. | |
| Closing date and location: | May 19, 2008; Sidley Austin LLP, 787 Seventh Avenue, New York, New York, 10019 | |
Notices: Notice to the Underwriters shall be directed to the Representative(s) c/o:
Citigroup Global Markets Inc.
Attention: Jack McSpadden
388 Greenwich Street
New York, New York 10013
J.P. Morgan Securities Inc.
Attention: Maria Sramek
9th Floor
270 Park Avenue
New York, New York 10017
Wachovia Capital Markets, LLC
Attention: Timothy Reid
One Wachovia
301 South College Street
Charlotte, North Carolina 28288
All of the provisions contained in the document attached as Annex I hereto entitled “ACE INA HOLDINGS INC.—Senior and Subordinated Debt Securities — Unconditionally Guaranteed as to Payment of Principal, Premium, if any, and Interest by ACE LIMITED —Underwriting Agreement” are hereby incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined.
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This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
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Please accept this offer no later than 8 o’clock P.M. (New York City time) on May 12, 2008 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us.
| Very truly yours, | ||
| CITIGROUP GLOBAL MARKETS INC. | ||
| By | /s/ Chandru M. Harjani | |
| Authorized Signatory | ||
| J.P. MORGAN SECURITIES INC. | ||
| By | /s/ Maria Sramek | |
| Authorized Signatory | ||
| WACHOVIA CAPITAL MARKETS, LLC | ||
| By | /s/ Carolyn Coan | |
| Authorized Signatory | ||
| Accepted: | ||
| ACE INA HOLDINGS INC. | ||
| By | /s/ Ken Koreyva | |
| Name: | Ken Koreyva | |
| Title: | Treasurer | |
| ACE LIMITED | ||
| By | /s/ Philip V. Bancroft | |
| Name: | Philip V. Bancroft | |
| Title: | Chief Financial Officer | |
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Schedule I
ISSUER FREE WRITING PROSPECTUS
Final Term Sheet dated May 12, 2008 (attached hereto as Schedule II)
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Schedule II
$450,000,000
ACE INA Holdings Inc.
5.600% Senior Notes due 2015
Fully and Unconditionally Guaranteed by
ACE Limited
FINAL TERM SHEET
Dated: May 12, 2008
| Issuer: | ACE INA Holdings Inc. | |||
| Guarantor: | ACE Limited | |||
| Issue Ratings: | A3 / A- / A (stable / stable / stable) | |||
| Security Type: | SEC Registered Senior Unsecured Notes | |||
| Size: | $450,000,000 | |||
| Maturity: | May 15, 2015 | |||
| Coupon (Interest Rate): | 5.60% | |||
| Price: | 99.647% | |||
| Yield: | 5.662% | |||
| Spread to Benchmark Treasury: | +225 bps | |||
| Benchmark Treasury: | 4.125% due 5/2015 | |||
| Benchmark Treasury Price and Yield: | 104-13+ (3.412% yield) | |||
| Interest Payment Dates: | The 15th day of each May and November, commencing November 15, 2008 | |||
| Redemption Provision: | Make Whole Call - UST +35 bps Redemption for Changes in Withholding Taxes - Par | |||
| Net Proceeds to ACE INA (before expenses): | $448,411,500 | |||
| Settlement: | T+5 (May 19, 2008) | |||
| Joint Book-Running Managers: | Citigroup Global Markets Inc. J.P. Morgan Securities Inc. Wachovia Capital Markets, LLC | |||
| Co-Managers: | Deutsche Bank Securities Inc. Greenwich Capital Markets, Inc. HSBC Securities (USA) Inc. Barclay’s Capital Inc. Mitsubishi UFJ Securities International plc |
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
The issuer and the guarantor have filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer and the guarantor have filed with the SEC for more complete information about the issuer, the guarantor and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Citigroup Global Markets Inc. toll free at ###-###-####, J.P. Morgan Securities Inc. at ###-###-#### (collect), or Wachovia Capital Markets, LLC at ###-###-#### or by e-mail at: ***@***.
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