Magazine article American Banker

Continental Leads Horace Mann Credit

Magazine article American Banker

Continental Leads Horace Mann Credit

Article excerpt

Continental Leads Horace Mann Credit

Horace Mann Educators Corp., just taken public through an initial stock offering, also closed late last week on a new $150 million revolving credit from a group of five banks led by Continental Bank.

Missing from the bank group was First Chicago Corp., which led the bank financing for the $462 million leveraged buyout of Horace Mann two years ago.

The Springfield, Ill., insurer was acquired from Cigna Corp. in 1989 by an investor group led by Gibbons Green van Amerongen.

Question of Timing

George Zock, treasurer of Horace Mann, said recommendations about a new bank credit were solicited from both Continental and First Chicago.

Continental was selected, he said, because the company agreed with the bank that the new credit should be completed simultaneously with the stock offering, rather than later, as First Chicago proposed.

First Chicago had no immediate comment.

Quartet of Coagents

Joining Continental as coagents were the banking units of Chase Manhattan Corp., Bank of Boston Corp., Bank of New York Corp., and Canadian Imperial Bank of Commerce.

Continental and Chase each provided $37.5 million, and the other three banks provided $25 million each.

The original buyout loan was classified as a highly leveraged transaction, but the new credit does not carry the HLT tag.

Deleveraging Accomplished

Horace Mann raise $252 million from the stock offering, and used the proceeds to pay off high-cost debt, thus deleveraging its balance sheet.

The company's debt-to-equity ratio is now under 40%, compared with over 80% after the buyout, according to Mr. …

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