The First American Corporation Announces Completion of Credit Facilities and Term Loan

—Company Initiates Tender Offer on Public Debt—


April 12, 2010, SANTA ANA, Calif.

The First American Corporation (NYSE: FAF), America’s largest provider of business information, announced today the accomplishment of several major milestones in preparation for the pending separation transaction, currently targeted for June 1, 2010, in which the Information Solutions Group and Financial Services Group will become separate public companies:

  • Execution and closing of an $850 million credit agreement that includes the $500 million revolving facility that will serve as the Information Solutions Group’s credit facility after the separation transaction.
  • Execution of a $400 million credit agreement for First American Financial Corporation, the entity that will be the parent company of the Financial Services Group following the separation of the two companies. The agreement provides for funds to be made available concurrently with the separation transaction.
  • Commencement of tender offers and related consent solicitations for all $350 million of the company’s outstanding public debt securities.

The Information Solutions Group’s Credit Agreement
The $850 million facility consists of a $500 million secured revolving credit line, due in 2012, along with a $350 million term loan due in 2016. The facility is secured by substantially all of the Information Solutions Group’s assets, is guaranteed by substantially all of the Information Solutions Group's subsidiaries and contains customary financial and operating covenants. 

The First American Financial Corporation Credit Agreement
The Financial Services Group’s facility is a $400 million partially secured facility due in 2013, and contains customary financial and operating covenants.

The Tender Offers and Consent Solicitations
First American announced that it has commenced cash tender offers for the outstanding $100 million 7.55 percent senior debentures due 2028, the $150 million 5.7 percent senior notes due 2014 and the $100 million 8.5 percent capital securities due 2012 (collectively referred to as the “notes”), as well as the PREFERRED PLUS 7.55 percent trust certificates issued by the PREFERRED PLUS Trust Series Far-1 due 2028 (the “certificates,” and with the notes, the “securities”), at the prices set forth in the table below, and subject to the terms and conditions set forth in the offer documents related to the cash tender offers. Holders of the securities will also be paid accrued interest or distributions, as applicable, if the tender offers are consummated. In conjunction with the tender offers, First American is soliciting from the holders of the notes consents to amend the indentures under which the notes were issued to expressly affirm that the separation transaction does not conflict with the terms of the indentures. 

 

Subject Securities and Certain Terms of the Tender Offers and Consent Solicitations

Security

CUSIP No.

Outstanding Amount

Tender Price
(per $1,000 principal amount, except as noted)

Consent Fee

7.55% Senior Debentures due 2028

318522AA7

$100,000,000

$1,000.00

$10.00
(as part of a separate consent solicitation, see below)

5.70% Senior Notes due 2014

31848JAA7

$150,000,000

$1,000.00

$10.00
(early consent fee as part of tender offer, see below)

8.50% Capital Securities due 2012 of First American Capital Trust I

31847JAB6

$100,000,000

$1,000.00

$10.00
(early consent fee as part of tender offer, see below)

PREFERRED PLUS 7.55%
Trust Certificates

740434659

$45,000,000
(representing 45%
of the 7.55% Senior Debentures due 2028) 

$25.00,
(per $25.00
stated amount of certificates)

N/A

 

 

5.7 Percent Senior Notes Due 2014 and 8.5 Percent Capital Securities Due 2012 Tender Offers and Consent Solicitations 
In the tender offers for the 5.7 percent senior notes due 2014 and 8.5 percent capital securities due 2012, First American is offering 100 basis points above par value as an early consent fee for all such notes validly tendered with consents by 5 p.m., New York City time, on April 23, 2010 (the "early tender time"), and par value for such notes that are validly tendered after the early tender time. First American’s consent solicitations, with respect to the 5.7 percent senior notes due 2014 and 8.5 percent capital securities due 2012, are being conducted concurrently with, and as part of, its tender offers to purchase such notes. Holders of the 5.7 percent senior notes due 2014 and the 8.5 percent capital securities due 2012 may not tender their securities without delivering consents in the consent solicitation.

7.55 Percent Senior Debentures Due 2028 Separate Consent Solicitation
First American is soliciting consents of holders of the 7.55 percent senior debentures due 2028 separately from its tender offer to purchase such notes and is offering a consent fee of $10 per $1,000 principal amount of consenting notes in the consent solicitation to amend the indenture with respect to the 7.55 percent senior debentures due 2028. The consent solicitation with respect to the 7.55 percent senior debentures due 2028 expires at 5 p.m., New York City time, on April 30, 2010.

PREFERRED PLUS Trust Series Far-1 Due 2028 Tender Offer
First American also announced that it has commenced a cash tender offer to purchase the certificates. The company is offering to purchase the certificates because they represent undivided beneficial interests in the $45 million in principal amount of First American’s 7.55 percent senior debentures due 2028 held by PREFERRED PLUS Trust Series Far-1. First American is offering to purchase the certificates for their stated amount of $25 per certificate. The company is not soliciting consents from holders of the certificates. Because PREFERRED PLUS Trust Series Far-1 is a holder of the 7.55 percent senior debentures due 2028, it is eligible to participate in the consent solicitation with respect to such notes.

Critical Dates and Times

  • All of the tender offers expire at 11:59 p.m., New York City time, on May 7, 2010.
  • The separate consent solicitation for the 7.55 percent senior debentures due 2028 expires at 5 p.m., New York City time, on April 30, 2010.
  • In the tender offers for the 5.7 percent senior notes due 2014 and 8.5 percent capital securities, the early tender time, after which no consent fee (only par value) will be paid, is 5 p.m., New York City time, on April 23, 2010. Tenders after such time will nonetheless continue to constitute consents in the related consent solicitation. 
  • Each of the above expiration times may be extended by First American in its sole discretion. The company will provide notice of any such extension by press release.

J.P. Morgan Securities Inc. is the dealer manager and solicitation agent for the tender offers and consent solicitations.

None of First American; Global Bondholder Services, the information agent for the tender offers and consent solicitations; Wilmington Trust Company, the depositary and tabulation agent for the tender offers and consent solicitations; or J.P. Morgan Securities Inc. makes any recommendation as to whether holders of any of the securities should tender or refrain from tendering or as to whether holders of such securities should provide consents to the proposed amendments. This press release does not constitute an offer to purchase any of the securities.

First American expressly reserves the right, in its sole discretion, subject to applicable law to:  (i) terminate prior to the relevant expiration date any tender offer and consent solicitation and not accept for payment any securities not previously accepted for payment, (ii) waive on or prior to the acceptance of any security any and all of the conditions of the applicable tender offer and the related consent solicitation, (iii) extend the relevant expiration date and (iv) amend the terms of any tender offer or consent solicitation. The foregoing rights are in addition to its right to delay acceptance for payment of securities tendered under the relevant tender offer or the payment for securities accepted for payment in order to comply in whole or in part with any applicable law, subject to Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended, to the extent applicable, which requires that an offeror pay the consideration offered or return the securities deposited by or on behalf of the holders thereof promptly after the termination or withdrawal of a tender offer.

This press release is for informational purposes only and is not an offer to buy, or the solicitation of an offer to sell, any of the securities. The full details of the tender offers for the securities, including complete instructions on how to tender securities, will be included in the offer to purchase and consent solicitation statements, the letter of transmittal, letter of consent, where applicable, and related materials.  Holders of the securities are strongly encouraged to read carefully the offer to purchase and consent solicitation statements, the letter of transmittal, letter of consent and any other related materials because they will contain important information. Holders of the securities may obtain a copy of the offers to purchase and consent solicitation statements, free of charge, from Global Bondholder Services Corporation, the information agent in connection with the tender offers and consent solicitations, by calling toll-free (866) 470-4500 or (212) 430-3774. Bankers and brokers may call collect at (212) 430-3774. 

About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500® company that traces its history to 1889. With total revenues of approximately $6.0 billion in 2009, it is America’s largest provider of business information. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within five primary business segments, including: Title Insurance and Services, Specialty Insurance, Information and Outsourcing Solutions, Data and Analytic Solutions, and Risk Mitigation and Business Solutions. More information about the company and an archive of its press releases can be found at www.firstam.com. 

Forward-Looking Statements
Certain statements made in this press release, including those related to the consummation of the spin-off separation and the structure and timing thereof, and the funding of the credit facilities and the timing thereof, are “forward-looking statements.”  These forward-looking statements may contain the words “intend,” “anticipate,” “expect,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result” or other similar words and phrases. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include those described in Part I, Item 1A of First American’s annual report on Form 10-K for the year ended Dec. 31, 2009. The forward-looking statements speak only as of the date they are made. Except as required by law, First American does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

 

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