January 16, 2013

Willkie advises The Allstate Corporation in offer and sale of $500 million aggregate principal amount of its 5.100% Fixed-to-Floating Rate Subordinated Debentures due 2053 and the restructuring of its Replacement Capital Covenants.

On January 10, Willkie client The Allstate Corporation closed its $500 million offering of 5.100% Fixed-to-Floating Rate Subordinated Debentures due 2053. J.P. Morgan Securities LLC, Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated served as joint book-running managers for the offering. The Subordinated Debentures received partial equity credit according to the rating agencies’ hybrid methodology.

As a result of the issuance of the Subordinated Debentures the new holders automatically become holders of "Covered Debt" under the Replacement Capital Covenants that Allstate had entered into in connection with the 2007 issuance of its Junior Subordinated Debentures. Allstate coupled the offering of the new Subordinated Debentures with an entry consent to terminate those Replacement Capital Covenants and then entered into new Replacement Capital Covenants with features that are more flexible for Allstate and that more closely align with the ratings agencies current hybrid methodology.

The Allstate Corporation is the nation’s largest publicly held personal lines insurer, serving approximately 16 million households through its Allstate, Encompass, Esurance and Answer Financial brand names. Allstate offers insurance products (auto, home, life and retirement) and services through Allstate agencies, independent agencies, and Allstate exclusive financial representatives.

The deal was handled by partners John Schwolsky and Vladimir Nicenko and associates Benjamin Nixon and Andrew Endicott. Partner Christopher Peters advised on the tax aspects of the structure and partner Ian Levin provided ERISA advice.