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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported):
July 10, 1997 (June 30, 1997)
SUPERIOR NATIONAL INSURANCE GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-25984 95-4610936
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
26601 Agoura Road, Calabasas, California 91302
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 880-1600
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(Former name or former address, if changed since last report.)
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ITEM 5.
Attached hereto as Exhibit 99.1 is the press release issued by
Superior National Insurance Group, Inc. dated July 1, 1997 which is hereby
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release dated July 1, 1997.
2.
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SIGNATURES
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 hereunto duly authorized.
Date: July 10, 1997
SUPERIOR NATIONAL
INSURANCE GROUP, INC.
By: /s/ J. CHRIS SEAMAN
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J. Chris Seaman
Executive Vice President
3.
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press release dated July 1, 1997.
4.
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EXHIBIT 99.1
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Calabasas, California
July 1, 1997
SUPERIOR NATIONAL INSURANCE GROUP, INC. ANNOUNCES
PREPAYMENT OF CHASE MANHATTAN BANK DEBT
Superior National Insurance Group, Inc. [Nasdaq:SNTL] announced the completion
on June 30, 1997 of the prepayment of approximately $88.6 million of long term
debt outstanding to Chase Manhattan Bank ("Chase"). The prepayment was
accomplished by transferring reinsurance receivables due from Centre
Reinsurance Limited ("Centre Re") to Chase in exchange for cancellation of the
debt. The prepayment was accomplished with no diminution of SNTL cash, and no
prepayment penalty.
The long term debt originated with a transaction completed on November 14,
1996, in which Chase extended a $93.1 million term loan (net of transaction
costs) to SNTL in exchange for future reinsurance recoveries due from Centre Re
to SNTL's subsidiary, Superior National Insurance Company ("SNIC"). The
proceeds from the financing were used by SNTL to purchase reinsurance
receivables due to SNIC from Centre Re, and SNIC utilized a portion of the
proceeds to extinguish a $71 million liability for reinsurance premiums due to
Centre Re. The $44 million term loan extended to SNTL by a bank syndicate led
by Chase Manhattan Bank, associated with SNTL's April 11, 1997 acquisition of
Pac Rim Holding Corporation, is not affected by the prepayment.
The effect of the transaction is to write off on SNTL's books approximately
$15.7 million of unamortized debt discount that would otherwise have been
amortized into interest expense through October 2004. SNTL will recognize an
extraordinary net-of-tax loss of approximately $10.4 million on the debt
prepayment in the second quarter of 1997.
The transaction has no effect on the statutory capital and surplus, operations,
or cash position of either Superior National Insurance Company or Superior
Pacific Casualty Company, SNTL's workers' compensation insurance subsidiaries.
J. Chris Seaman, Executive Vice President and Chief Financial Officer, stated,
"As a result of the write off of the unamortized discount resulting from the
prepayment of the Chase debt, pretax operating expense will be reduced by $3.1,
$5.1 and $2.9 million during the remainder of 1997, 1998, and 1999,
respectively. In addition, the transaction de-leverages the consolidated
balance sheet by almost $89 million, which should improve the various rating
agencies' views of the company."
Superior National Insurance Group, Inc. is the parent company of Superior
Pacific Insurance Group, which operates Superior National Insurance Company and
Superior Pacific Casualty Company (formerly The Pacific Rim Assurance Company),
principally workers' compensation insurers operating in California through
branch offices located in Sacramento, South San Francisco, Fresno, Calabasas,
Irvine, and San Diego, and in Phoenix, Arizona.
"This release contains forward looking statements within the meaning of Section
17A of the Securities Act of 1933 and Section 21E of the Securities Act of
1934. Actual results could differ materially from those projected in
forward-looking statements as a result of the variability of business
conditions and the inherent difficulty of accurately forecasting revenues and
expenses."
