UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 Commission File Number
event reported): 1-8233
August 29, 1994
USF&G CORPORATION
(Exact Name of Registrant as Specified in Charter)
Maryland 52-1220567
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
100 Light Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices)
(410) 547-3000
(Registrant's telephone number, including area code)
USF&G CORPORATION
FORM-8K
______________________
Item 5. Other Events
On August 29, 1994, USF&G issued a press release announcing
its call for redemption on September 28, 1994, of 950,000
shares, or 25 percent, of its outstanding $5.00 Series C
Cumulative Preferred Stock. The press release is
incorportated herein by reference as Exhibit I to this form.
EXHIBIT I
August 29, 1994
FOR IMMEDIATE RELEASE
CONTACT: Kerrie Burch-DeLuca
(410) 547-3573
USF&G CORPORATION CALLS 25 PERCENT OF
$5.00 SERIES C CUMULATIVE
CONVERTIBLE PREFERRED STOCK
USF&G Corporation today announced its call for redemption
on September 28, 1994, of 950,000 shares or 25 percent of its
outstanding $5.00 Series C Cumulative Convertible Preferred Stock
("Series C", ticker:FGpC) at a redemption price of $53.50 per share
plus accrued dividends of $0.81. A notice of redemption will be
mailed to all holders of those Series C shares called for
redemption. First Chicago Trust Company of New York, transfer
agent, has determined the shares to be called randomly by lot.
USF&G has 3.8 million shares of the Series C outstanding.
USF&G Corporation issued the Series C in June 1991 at the
outset of significant financial and operational restructuring of the
company. Given the improvement in the company's overall financial
position and its return to profitability, USF&G has chosen to begin
retiring a portion of this high-coupon (10 percent) preferred stock.
This transaction is expected to produce savings of approximately
$4 million annually.
At the holder's option, Series C shares called for
redemption are convertible into 4.158 shares of USF&G common stock
until the redemption date, at which time this option will expire.
As long as the common stock price is greater than $13.06, holders of
the Series C who convert will receive USF&G common stock (plus cash
for fractional shares) with market value greater than the amount of
cash the holders would otherwise be entitled to receive upon
redemption. USF&G's common stock closed at $13.75 per share on
the New York Stock Exchange on Friday, August 26.
Those Series C shares not called for redemption are also
convertible into common stock at any time at the holder's option.
USF&G has entered into an agreement with an unaffiliated
financial institution to place common stock to fund cash redemptions
if necessary. At June 30, 1994, there were approximately 85.4
million shares of USF&G common stock outstanding. USF&G will issue
approximately 4 million additional common shares either through
conversions or pursuant to these arrangements.
Baltimore-based USF&G Corporation, with assets of $14.0
billion, is composed of property/casualty and life insurance
subsidiaries. The corporation's principal subsidiary is the United
States Fidelity and Guaranty Company, one of the nation's largest
property/casualty insurers, founded in 1896.
USF&G CORPORATION
FORM 8-K
______________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned hereunto duly authorized.
USF&G CORPORATION
By: DAN L. HALE
Dan L. Hale
Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer
August 29, 1994
