<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
----------
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) JANUARY 16, 1998
----------
CAPMAC HOLDINGS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------
DELAWARE 1-14096 13-3670828
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or organization) Identification No.)
885 THIRD AVENUE 10022
NEW YORK, NY (Zip Code)
(Address of principal executive
offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 755-1155
<PAGE>
ITEM 5. OTHER EVENTS
CapMAC Holdings Inc. ("CapMAC") and MBIA Inc. ("MBIA") announced that on
January 16, 1998, MBIA, CMA Acquisition Corporation, a wholly owned subsidiary
of MBIA ("Merger Sub"), and CapMAC entered into Amendment No. 1, dated January
16, 1998 (the "Amendment"), to their Agreement and Plan of Merger, dated as of
November 13, 1997 (the "Merger Agreement"), revising the terms of the Merger
Agreement to reduce the exchange ratio for determining the number of shares of
MBIA common stock to be received in the merger by holders of CapMAC common
stock.
Under the revised merger terms, each share of CapMAC common stock will be
converted into the right to receive the number of shares of MBIA common stock
obtained by dividing $31.00 (rather than $35.00 as originally provided) by the
average of the closing sales prices of MBIA common stock on the New York Stock
Exchange Composite Tape for the 15 trading days preceding the third trading day
prior to the effective time of the merger. In contrast to the original merger
terms, such exchange ratio will not be subject to any "collar" in the event of a
significant change in the price of MBIA's stock. A copy of the Amendment is
attached hereto as Exhibit 2, and is incorporated herein by reference.
On January 16, 1998, MBIA and CapMAC issued a joint press release
announcing the execution of the Amendment. A copy of CapMAC and MBIA's joint
press release dated January 16, 1998 is attached hereto as Exhibit 99 and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
(c) Exhibits.
2.1 Amendment No. 1, dated as of January 16, 1998, to the Agreement
and Plan of Merger, dated as of November 13, 1997, by and among MBIA Inc.,
CMA Acquisition Corporation and CapMAC Holdings Inc.
99.1 Joint Press Release of MBIA Inc. and CapMAC Holdings Inc. dated
January 16, 1998.
<PAGE>
2
SIGNATURE
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.
CapMAC Holdings Inc.
Dated: January 16, 1998 By:/s/ Ram D. Wertheim
---------------------
Name: Ram D. Wertheim
Title: Managing Director
and General Counsel
<PAGE>
3
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2.1 Amendment No. 1, dated as of
January 16, 1998, to the
Agreement and Plan of Merger,
dated as of November 13, 1997,
by and among MBIA Inc., CMA
Acquisition Corporation and
CapMAC Holdings Inc.
99.1 Joint Press Release of MBIA Inc.
and CapMAC Holdings Inc. dated
January 16, 1998.
<PAGE>
Exhibit 2.1
AMENDMENT NO. 1
to
AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 1, dated January 16, 1998, to AGREEMENT AND PLAN OF
MERGER, dated as of November 13, 1997 (the "Original Agreement", and as so
-------- ---------
amended, the "Agreement"), among MBIA INC., a Connecticut corporation
---------
("Parent"), CMA ACQUISITION CORPORATION, a Delaware corporation and a wholly
------
owned subsidiary of Parent ("Sub"), and CAPMAC HOLDINGS INC., a Delaware
---
corporation (the "Company").
-------
WHEREAS, the Company, Parent and Sub have entered into the Original
Agreement;
WHEREAS, the Company, Parent and Sub now wish to amend the Original
Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Sub and the Company hereby agree as follows:
1. The preamble to the Original Agreement is hereby amended to read
in its entirety as follows:
AGREEMENT AND PLAN OF MERGER, dated as of November 13, 1997, as
amended by Amendment No. 1 thereto, dated January 16, 1998 (as so amended, the
"Agreement"), among MBIA INC., a Connecticut corporation ("Parent"), CMA
- ---------- ------
ACQUISITION CORPORATION, a Delaware corporation and a wholly owned subsidiary of
Parent ("Sub"), and CAPMAC HOLDINGS INC., a Delaware corporation (the
---
"Company").
-------
2. The second sentence of Section 1.6(a) of the Original Agreement is
hereby amended to read in its entirety as follows:
For purposes of this Agreement, "Exchange Ratio" means $31.00 divided by
--------------
the Parent Common Stock Price (as defined below), rounded to the nearest
1/10,000.
<PAGE>
3. The second paragraph of Section 2.1 of the Original Agreement is
hereby amended to read in its entirety as follows:
As used in this Agreement, "Material Adverse Effect" means any
-----------------------
adverse change or effect that is materially adverse to the financial
condition, results of operations, assets, liabilities or business of a
person or on the ability of such person to perform its obligations
hereunder, but shall exclude any change or effect resulting from any
occurrence or condition generally affecting the industry in which such
person and its subsidiaries operate (including without limitation any
change or proposed change in insurance laws or regulations in any
jurisdiction or official interpretations thereof), any occurrence or
condition relating to developments in Asia and any occurrence or condition
arising out of the transactions contemplated by this Agreement or the
public announcement thereof.
4. The second sentence of Section 5.4(b) of the Original Agreement
shall be amended to read in its entirety as follows:
Notwithstanding the foregoing, the Company may, at any time after March 15,
1998, directly or indirectly, furnish information and access, in each case
only in response to a written request for such information or access made
after the date hereof by any person which was not encouraged, solicited or
initiated by the Company or any of its officers, directors, employees,
representatives or agents after the date hereof, and participate in
discussions and negotiate with such person concerning any Acquisition
Proposal, if, and only to the extent that (i) such person has submitted a
bona fide definitive written Acquisition Proposal to the Board of Directors
of the Company, (ii) the Board, after consultation with its independent
financial advisors, determines that (x) the person making such Acquisition
Proposal is reasonably capable of completing such Acquisition Proposal,
taking into account the legal, financial, regulatory and other aspects of
such Acquisition Proposal and the person making such Acquisition Proposal
and (y) such Acquisition Proposal involves consideration to the Company's
stockholders and other terms and conditions that, taken as a whole, are
superior to the Merger (a proposal described in this clause (ii), a
"Superior Proposal"), and (iii) the Board determines in good faith, based
------------------
upon the advice of outside counsel to the Company, that taking any such
action is necessary for the Board to comply with its fiduciary duty to
stockholders under applicable law.
5. Section 7.1(b) of the Original Agreement is hereby amended by
deleting the word "or" where it appears at the end of clause (ii) thereof,
replacing the
2
<PAGE>
period at the end of clause (iii) thereof with "; or", and by adding a new
clause (iv) thereto reading as follows:
(iv) if the Company Stockholder Approval shall not have been
obtained on or before March 15, 1998.
6. Section 7.1(d) of the Original Agreement is hereby amended to read
in its entirety as follows:
(d) By the Company in accordance with Section 5.4; provided that such
--------
termination under this clause (d) shall not be effective until the Company
has made payment of the Termination Fee and the Facility Fee required by
Section 7.3.
7. Section 7.3(a) of the Original Agreement is hereby amended to read
in its entirety as follows:
(a) The Company shall pay, or cause to be paid, in same day funds to
Parent $19.4 million (the "Termination Fee") and $8 million (the "Facility Fee")
---------------
under the circumstances and at the times set forth as follows:
(i) if Parent terminates this Agreement pursuant to Section 7.1(c)
hereof, the Company shall pay the Termination Fee and the Facility Fee upon
demand;
(ii) if the Company terminates this Agreement pursuant to Section
7.1(d) hereof, the Company shall pay the Termination Fee and the Facility
Fee concurrently therewith;
(iii) if (1) Parent terminates this Agreement pursuant to Section
7.1(b)(iii), 7.1(b)(iv) or 7.1(e) and (2) prior to such termination an
Acquisition Proposal shall have been publicly announced (other than an
Acquisition Proposal made prior to the date hereof) and (3) within six
months thereafter, (A) the Company enters into a definitive agreement with
respect to an Acquisition Proposal or an Acquisition Proposal is
consummated involving any party (x) with whom the Company had any
discussions with respect to an Acquisition Proposal, (y) to whom the
Company furnished information with respect to or with a view to an
Acquisition Proposal or (z) who had submitted a proposal or expressed any
interest publicly in an Acquisition Proposal, in the case of each of
clauses (x), (y) and (z), prior to such termination, or (B) the Company
enters
3
<PAGE>
into a definitive agreement with respect to a Superior Proposal, or a
Superior Proposal is consummated, then, in the case of either (A) or (B)
above, the Company shall pay the Termination Fee and the Facility Fee upon
the earlier of the execution of such agreement or upon consummation of such
Acquisition Proposal or Superior Proposal.
8. This Amendment shall be governed by the laws of the State of
Delaware (regardless of the laws that might otherwise govern under applicable
principles of conflicts of law) as to all matters, including, but not limited
to, matters of validity, construction, effect, performance and remedies.
9. Except as expressly provided in this Amendment, the Original
Agreement shall continue in full force and effect in accordance with the
provisions thereof.
10. This Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
MBIA INC.
By: /s/ David H. Elliott
____________________________
Name: David H. Elliott
Title: Chairman
CMA ACQUISITION CORPORATION
By: /s/ David H. Elliott
____________________________
Name: David H. Elliott
Title: President
CAPMAC HOLDINGS INC.
By: Ram D. Wertheim
____________________________
Name: Ram D. Wertheim
Title: Secretary and General Counsel
5
<PAGE>
EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
- ---------------------
Contacts: Mike Ballinger at MBIA
(914-765-3893)
Mary Bergo Vermylen at CapMAC
(212-891-6719)
CAPMAC HOLDINGS INC. AND MBIA INC.
LOWER EXCHANGE RATIO OF THEIR PENDING MERGER
Armonk, NY and New York, NY, January 16, 1998 - CapMAC Holdings Inc. (NYSE:KAP)
and MBIA Inc. (NYSE:MBI) announced that they have revised the terms of their
merger agreement to reduce the exchange ratio for determining the number of
shares of MBIA common stock to be received in the merger by holders of CapMAC
common stock.
Under the revised merger terms, each share of CapMAC common stock will be
converted into the right to receive the number of shares of MBIA common stock
obtained by dividing $31 (rather than $35 as originally provided) by the average
of the closing price of MBIA common stock for the 15 trading days preceding the
third trading day prior to the effective time of the merger. In contrast to the
original merger terms, the $31 exchange ratio will not be subject to any
"collars" in the event of a significant change in the price of MBIA's stock.
CapMAC and MBIA said the revision of the merger exchange ratio resulted from the
recent downgrading by Standard & Poor's and Moody's Investors Service to below
investment grade of the sovereign credit ratings of various Asian countries,
including various countries in which CapMAC has exposure. CapMAC said that no
claims have arisen under policies issued by CapMAC, whose portfolio continues to
perform according to expectations. On January 15, 1998 Standard & Poor's also
downgraded its credit rating of Asian Securitization and Infrastructure
Assurance (Pte) Ltd. ("ASIA Ltd"), a bond guarantor specializing in Asian
obligations in which CapMAC has an 11% equity interest. The downgradings of
Asian sovereign ratings and of ASIA Ltd have resulted in corresponding
downgrades in selected underlying ratings within CapMAC's insured portfolio. In
addition, reinsurance that
<PAGE>
CapMAC has received from ASIA Ltd is now from a non-
investment grade provider. As a result, Standard & Poor's has indicated to
CapMAC that additional capital would be required. CapMAC has obtained from MBIA
and other insurance companies commitments to provide additional capital support.
David H. Elliott, Chairman and Chief Executive Officer of MBIA, said "MBIA
continues to believe that a merger with CapMAC is in our best strategic
interests. With the revised merger terms, we also believe that this
transaction furthers MBIA's financial objectives." John B. Caouette, Chairman
and Chief Executive Officer of CapMAC, said, "We don't believe that recent
developments in Asia will have any long-term impact on our portfolio and we
appreciate the endorsement of that view by MBIA and other insurers through their
commitment to provide additional capital to CapMAC. Given our need for
additional capital, CapMAC's Board of Directors believes that the revised merger
terms are in the best interests of CapMAC's stockholders."
CapMAC and MBIA said their current expectation is that the merger will be
consummated in mid to late February.
CapMAC Holdings Inc., through its subsidiaries, provides structured financial
solutions; financial guarantee insurance of structured securities, primarily
asset-backed securities; advisory and structuring services in connection with
structured financings; investment management; and access to funding for its
customers through third-party owned and managed securitization funding vehicles.
Capital Markets Assurance Corporation (CapMAC), CapMAC Holdings' principal
operating subsidiary, is a leading provider of financial guarantee insurance for
structured securities, worldwide. CapMAC is rated Triple-A by Moody's Investors
Services, Standard & Poor's Rating Services, Duff & Phelps Credit Rating Co. and
Nippon Investors Service. CapMAC Holdings is the lead investor in Asian
Securitization & Infrastructure Assurance (Pte) Ltd (ASIA Ltd), Asia's first
financial guarantee company.
MBIA Inc., through its subsidiaries, is the world's preeminent financial
guarantor and a leading provider of specialized financial services. MBIA
provides innovative and cost-effective products and services that meet the
credit enhancement, financial and investment needs of its public and
2
<PAGE>
private clients, domestically and internationally. MBIA Insurance Corporation
has a claims-paying rating of Triple-A from Moody's Investors Service, Inc.,
Standard & Poor's Rating Services and Fitch Investors Service. Please visit
MBIA's web site at http://www.mbia.com.
3
