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
February 5, 2007
| 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 $500,000,000 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.
| Underwriters | Percentage | Principal Amount of Underwritten Securities | ||||
| Banc of America Securities LLC | 30.0 | % | $ | 150,000,000 | ||
| Deutsche Bank Securities Inc. | 30.0 | % | $ | 150,000,000 | ||
| Citigroup Global Markets Inc. | 5.0 | % | $ | 25,000,000 | ||
| HSBC Securities (USA) Inc. | 5.0 | % | $ | 25,000,000 | ||
| J.P. Morgan Securities Inc. | 5.0 | % | $ | 25,000,000 | ||
| Greenwich Capital Markets, Inc. | 5.0 | % | $ | 25,000,000 | ||
| Wachovia Capital Markets, LLC | 5.0 | % | $ | 25,000,000 | ||
| ABN AMRO Incorporated | 3.3 | % | $ | 16,667,000 | ||
| Barclays Capital Inc. | 3.3 | % | $ | 16,667,000 | ||
| Mitsubishi UFJ Securities International plc | 3.3 | % | $ | 16,666,000 | ||
| BNP Paribas Securities Corp. | 1.0 | % | $ | 5,000,000 | ||
| Calyon Securities (USA) Inc. | 1.0 | % | $ | 5,000,000 | ||
| KeyBanc Capital Markets, a division of McDonald Investments Inc. | 1.0 | % | $ | 5,000,000 | ||
| Lloyds TSB Bank plc | 1.0 | % | $ | 5,000,000 | ||
| RBC Capital Markets Corporation | 1.0 | % | $ | 5,000,000 | ||
| Settlement Date (T+3 days): | 100.0 | % | $ | 500,000,000 | ||
The Underwritten Securities shall have the following terms:
| Title: | 5.70% Senior Notes due 2017 | |
| Rank: | Senior Debt | |
| Ratings: | Moody’s Investors Service, Inc. – A3 (Stable) | |
| Standard & Poor’s Rating Service – A- (Stable) | ||
| Fitch – A (Stable) | ||
| Aggregate principal amount: | $500,000,000 | |
| Denominations: | $1,000 and integral multiples thereof | |
| Currency of payment: | United States dollars | |
| Interest rate or formula: | 5.70% per annum | |
| Interest payment dates: | Each February 15 and August 15, commencing August 15, 2007 | |
| Regular record dates: | Each February 1 and August 1 | |
| Stated maturity date: | February 15, 2017 | |
| Redemption provisions: | As disclosed in the Company’s Prospectus Supplement dated February 5, 2007 to Prospectus dated December 16, 2005 | |
| Sinking fund requirements: | None | |
| Conversion or exchange provisions: | None | |
| Listing requirements: | None | |
| Black-out provisions: | None | |
| Fixed or Variable Price Offering: | Fixed Price Offering | |
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| Initial public offering price: | 99.923% of the principal amount, plus accrued interest, if any, from February 8, 2007. | |
| Purchase price: | 99.273% of the 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, National Association, 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: | February 8, 2007; Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019 | |
Notices: Notice to the Underwriters shall be directed to the Representatives c/o:
Banc of America Securities LLC
Attention: High Grade Transaction Management/Legal
40 West 57th Street
NY1-040-27-03
New York, New York 10019
and
Deutsche Bank Securities Inc.
Attention: Debt Capital Markets-Insurance Group/General Counsel
60 Wall Street
New York, NY 10005
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.
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 February 5, 2007 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us.
| Very truly yours, | ||
| BANC OF AMERICA SECURITIES LLC | ||
| By | JOSEPH CROWLEY | |
| Authorized Signatory | ||
| DEUTSCHE BANK SECURITIES INC. | ||
| By | MARY HARDGROVE | |
| Authorized Signatory | ||
| By | BRUNO MASTROPASQUA | |
| Authorized Signatory | ||
| Acting on behalf of themselves and as Representatives of the other named Underwriters. | ||
| Accepted: | ||
| ACE INA HOLDINGS INC. | ||
| By | KEN KOREYVA | |
| Name: Ken Koreyva Title: Treasurer | ||
| ACE LIMITED | ||
| By | 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 February 5, 2007 (attached hereto as Schedule II).
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Schedule II
Filed Pursuant To Rule 433
Registration Statements No. 333-130378 and 333-130378-02
$500,000,000
ACE INA Holdings Inc.
5.70% Senior Notes due 2017
Fully and Unconditionally Guaranteed by
ACE Limited
FINAL TERM SHEET
Dated: February 5, 2007
| Issuer: | ACE INA Holdings Inc. | |
| Guarantor: | ACE Limited | |
| Issue Ratings: | A3/A-/A(stable/stable/stable) | |
| Security Type: | SEC Registered Senior Unsecured Notes | |
| Size: | $500,000,000 | |
| Maturity: | February 15, 2017 | |
| Coupon (Interest Rate): | 5.70% | |
| Price: | 99.923% | |
| Yield: | 5.71% | |
| Spread to Benchmark Treasury: | +90 bps | |
| Benchmark Treasury: | 4.625% due 11/15/16 | |
| Benchmark Treasury Price and Yield: | 98.18 (4.81% yield) | |
| Interest Payment Dates: | The 15th day of each February and August, commencing August 15, 2007 | |
| Redemption Provision: | Make Whole Call – UST +20 Redemption for Changes in Withholding Taxes – Par | |
| Net Proceeds to ACE INA (before expenses): | $496,365,000 | |
| Settlement: | T+3 (February 8, 2007) | |
| Joint Bookrunning Managers: | Banc of America Securities LLC Deutsche Bank Securities Inc. | |
| Co-Managers: | Citigroup Global Markets Inc. HSBC Securities (USA) Inc. J.P. Morgan Securities Inc. Greenwich Capital Markets, Inc. Wachovia Capital Markets, LLC ABN AMRO Incorporated Barclays Capital Inc. Mitsubishi UFJ Securities International plc BNP Paribas Securities Corp. Calyon Securities (USA) Inc. KeyBanc Capital Markets, a Division of McDonald Investments Inc. Lloyds TSB Bank plc RBC Capital Markets Corporation |
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
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dealer participating in the offering will arrange to send you the prospectus if you request it by calling Banc of America Securities LLC toll-free at ###-###-#### or Deutsche Bank Securities Inc. at ###-###-####.
Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg or another email system.
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