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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 8.01 Other Events.
As previously disclosed in Kingsway Financial Services Inc.’s (the “Company”) Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, the Company’s subsidiary, Kingsway America Inc. (“KAI”), entered into repurchase agreements with holders (the “Holders”) of five series of KAI’s trust preferred debt instruments (the “Series 1-5 TruPs”) that gave KAI options to repurchase up to 100% of the Series 1-5 TruPs (the “Repurchase Options”) held by the Holders.
In February 2023, KAI entered into amendments to the repurchase agreements with each of the Holders that would give KAI an additional discount on the total repurchase price if KAI effected the repurchase of 100% of the Series 1-5 TruPs on or before March 15, 2023.
On March 2, 2023, KAI gave notice to the Holders that it intends to exercise the Repurchase Options and repurchase all of the Series 1-5 TruPs no later than March 15, 2023.
The total amount to be paid will be $56.5 million, which includes a credit for the $2.3 million that it previously paid at the time of entering into the repurchase agreements. As a result, KAI will have repurchased $75.5 million of principal and $21.2 million of deferred interest (valued as of December 31, 2022). In order to execute the repurchase, KAI will have to pay an estimated $4.7 million of deferred interest to the remaining trust preferred debt instrument for which KAI did not have the right to repurchase. After the repurchase is completed, KAI will continue to have $15 million of principal outstanding related to remaining trust preferred debt instrument. KAI intends to use currently available funds from working capital to fund the repurchases.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KINGSWAY FINANCIAL SERVICES INC. | ||
| Date: March 2, 2023 | By: | /s/ Kent A. Hansen |
| Kent A. Hansen | ||
| Chief Financial Officer | ||
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