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 event reported): Commission File Number
January 25, 1995 1-8233
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 January 25, 1995, USF&G Corporation ("USF&G") issued a press release
announcing its call for redemption of all outstanding shares, (approximately 1.3
million shares), of $5.00 Series C Cumulative Convertible Preferred Stock on
February 24, 1995. The press release is incorporated herein by reference as
Exhibit I to this form.
EXHIBIT I
January 25, 1995
FOR IMMEDIATE RELEASE
CONTACT: Kerrie Burch-DeLuca
(410) 547-3573
USF&G CORPORATION CALLS ALL OUTSTANDING $5.00
SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK
USF&G Corporation today announced its call for redemption on
February 24, 1995, of all outstanding shares of $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 $0.33. USF&G currently has 1.3
million shares of the Series C outstanding.
USF&G Corporation issued the Series C in June 1991 at the outset of
its significant financial and operational restructuring. On September 28 and
November 28, 1994, the company completed the call of 950,000 shares and 1.4
million shares, respectively, of the original total of 3.8 million shares of the
Series C, resulting in a significant percentage of shares called converting to
common stock. In light of the success of the prior two calls, USF&G has chosen
to retire the remaining high-coupon (10 percent ) preferred stock
outstanding.
This transaction, together with the previous two calls, is expected to
produce annual cash dividend savings of approximately $16 million. Annual cash
dividend savings from this final call of the Series C issue are approximately
$6 million .
At the holder's option, the Series C shares are convertible into 4.158
shares of USF&G common stock until the redemption date, February 24, 1995, at
which time this option will expire. As long as the common stock price is
greater than $12.95, holders of the Series C who convert will receive USF&G
common stock (plus cash for fractional shares) with a market value greater than
the amount of cash that the holder would otherwise be entitled to receive upon
redemption. USF&G's common stock closed at $14.875 per common share on the New
York Stock Exchange on January 24, 1995.
USF&G has, as with the previous transactions, entered into an
agreement with an unaffiliated financial institution to place common stock to
fund cash redemptions, if necessary. At December 31, 1994, there were
approximately 95.6 million shares of common stock outstanding. As a result of
the final call of the Series C, USF&G will issue approximately 5.5 million
additional common shares either through conversions into common stock or these
arrangements.
Baltimore-based USF&G Corporation, with assets of $13.8 billion, is
composed of property/casualty and life insurance subsidiaries. The
corporation's principal operating 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,
and Chief Financial Officer
January 25, 1995
