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GALLAGHER ARTHUR J & CO FILES (8-K) Disclosing Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

June 25, 2014



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.



On June 24, 2014, Arthur J. Gallagher & Co. ("Gallagher") issued, in a private placement, $700 million aggregate principal amount of unsecured senior notes (collectively, the "Notes"), in six series: (i) $50 million 2.80% Series K Senior Notes, due in 2018, (ii) $50 million 3.20% Series L Senior Notes, due in 2019, (iii) $50 million 3.48% Series M Senior Notes, due in 2020, (iv) $200 million 4.13% Series N Senior Notes, due in 2023, (v) $200 million 4.31% Series O Senior Notes, due in 2025, and (vi) $150 million 4.36% Series P Senior Notes, due in 2026. Interest on the Notes is payable semi-annually in arrears on June 24 and December 24 of each year, beginning on December 24, 2014. Gallagher issued the Notes pursuant to the terms of a Note Purchase Agreement dated as of June 24, 2014 (the "Purchase Agreement") with certain accredited institutional investors. The Notes, unconditionally guaranteed by certain of Gallagher's subsidiaries (collectively, the "Subsidiary Obligors"), are senior unsecured obligations of Gallagher and the Subsidiary Obligors and rank equal in right of payment with all other senior unsecured indebtedness of Gallagher and the Subsidiary Obligors.

The Purchase Agreement contains customary provisions for transactions of this type, including representations and warranties regarding Gallagher and its subsidiaries and various covenants, including covenants that require Gallagher to maintain specified financial ratios. The Purchase Agreement provides for customary events of default, generally with corresponding grace periods, including, without limitation, payment defaults with respect to the Notes, covenant defaults, cross-defaults to other agreements evidencing indebtedness of Gallagher or its restricted subsidiaries, certain judgments against Gallagher or its restricted subsidiaries and events of bankruptcy involving Gallagher or its material subsidiaries.

Under the terms of the Purchase Agreement, the Notes are redeemable by Gallagher, in whole or in part, at 100% of the principal amount being redeemed, together with accrued and unpaid interest and a make-whole amount with respect to each Note. If within 90 days after a change in control Gallagher (or its successor) does not have an investment grade rating, Gallagher is obligated to offer to prepay all of the outstanding Notes at the principal amount thereof plus accrued interest (but without any make-whole amount or other premium).

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Source: Edgar Glimpses


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