SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - September 6, 2000
HSB Group, Inc.
(Exact name of registrant as specified in its charter)
Connecticut 001-13135 06-1475343
(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification
No.)
One State Street, Hartford, Connecticut 06102-5024
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (860-722-1866)
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Item 5. Other Events.
HSB Group, Inc. (the "Registrant") and Employers Reinsurance Corporation ("ERC")
have entered into an agreement (the "Redemption Agreement") under which
Registrant has agreed to redeem for $315 million the convertible capital
securities, with an aggregate liquidation preference of $300 million, issued by
HSB Capital II, a statutory business trust created and wholly owned by
Registrant. The redemption is expected to occur on or before September 14, 2000.
The Redemption Agreement is attached hereto as Exhibit 10(ii)(a) and is
incorporated herein by reference, and the description of the Redemption
Agreement and the transactions contemplated thereby contained herein are
qualified in their entirety by reference to the Redemption Agreement.
In connection with the previously announced merger agreement between the
Registrant and American International Group, Inc. ("AIG"), the Registrant and
AIG have entered into a Term Loan Agreement (the "Loan Agreement") dated as of
September 6, 2000 under which AIG will loan Registrant $315 million on or before
September 14, 2000 to be evidenced by a promissory note for a five year term
with interest at a rate of approximately 50 basis points in excess of AIG's
funding cost at the time of issuance of the note for debt of similar maturity.
Payment of the loan will be accelerated, among other reasons, if Registrant
enters into an acquisition agreement with another party. Proceeds from the loan
will be used to finance the redemption of the convertible capital securities
held by ERC and one of its subsidiaries. The Loan Agreement is attached hereto
as Exhibit 10(ii)(b) and is incorporated herein by reference and the description
of the Loan Agreement and the transactions contemplated thereby contained herein
are qualified in their entirety by reference to the Loan Agreement.
On September 7, 2000, the Registrant issued a press release announcing the
Redemption Agreement and the Loan Agreement. The press release is attached
hereto as Exhibit 99 and is incorporated herein by reference.
Item 7. Exhibits.
10(ii)(a) Redemption Agreement dated August 23, 2000 between Employers
Reinsurance Corporation and HSB Group, Inc.
10(ii)(b) Term Loan Agreement dated as of September 6, 2000 between American
International Group, Inc. and HSB Group, Inc.
99 Press release dated September 7, 2000.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSB Group, Inc.
Dated: September 7, 2000 /s/ R. Kevin Price
R. Kevin Price
Senior Vice President
and Corporate Secretary
