Selective Insurance Group Issues $400M in Senior Notes

Selective Insurance Group, Inc. (NASDAQ:SIGI), a $5 billion market cap insurer currently trading below its InvestingPro Fair Value, has successfully issued $400 million in senior notes, the company announced today. The 5.900% Senior Notes, due April 15, 2035, were sold under a Prospectus Supplement dated February 20, 2025, as part of a larger registration statement filed with the U.S. Securities and Exchange Commission.

The New Jersey-based insurer, operating under the fire, marine, and casualty insurance industry, entered into an underwriting agreement on February 20, 2025, with Goldman Sachs & Co. LLC, BofA Securities, Inc., and Wells Fargo (NYSE:WFC) Securities, LLC. The notes will pay interest semi-annually, with the first payment due on October 15, 2025.

Selective Insurance Group has the option to redeem the notes prior to January 15, 2035, at a "make-whole" redemption price as specified in the indenture. After this date, the company may redeem the securities at any time at 100% of their principal amount plus accrued interest.

The issuance is governed by an indenture, consisting of a Base Indenture dated February 8, 2013, and a Third Supplemental Indenture dated February 25, 2025, between Selective Insurance Group and U.S. Bank Trust Company, National Association, serving as the trustee.

The indenture includes customary limitations on liens on stock of Restricted Subsidiaries and standard events of default clauses. This financial move follows the company’s strategic efforts to manage its capital and strengthen its financial position.

The information disclosed here is based on a press release statement and the details provided in the Form 8-K filed with the SEC, ensuring a transparent and factual presentation of the company’s latest financial activity. With expected net income growth this year and a 51-year track record of consistent dividend payments, Selective Insurance continues to demonstrate financial resilience. For deeper insights into SIGI’s financial health and growth prospects, including exclusive ProTips and comprehensive analysis, visit InvestingPro.

In other recent news, Selective Insurance Group reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $1.62, which fell short of the forecasted $1.99. Despite this, the company’s revenue exceeded expectations, reaching $1.26 billion compared to the anticipated $1.09 billion. Following these results, Keefe, Bruyette & Woods downgraded Selective Insurance’s stock rating to Market Perform and lowered the price target from $116.00 to $93.00, citing revised EPS estimates for future years due to higher core loss ratios. Similarly, Morgan Stanley (NYSE:MS) reduced its price target for Selective Insurance from $95.00 to $87.00, maintaining an Equalweight rating, as they adjusted EPS estimates based on increased catastrophe forecasts and financial guidance for 2025.

The financial performance of Selective Insurance has been closely monitored, with analysts noting the impact of social inflation on the property and casualty insurance industry. The company’s operating return on equity for the year was 7.1%, below its target of 12%, reflecting ongoing market challenges. Despite these challenges, Selective Insurance reported a 12% growth in net premiums written for the full year. The firm projects a GAAP combined ratio between 96% and 97% for 2025, with an anticipated 12% increase in after-tax net investment income to $405 million.

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