-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EhHhjFO6XOcfhMKbJKkej34QQOY9owqOCk+x+CroUjq5ESteV90JGS6WahGhlTQj CVGOzVm2h5o97j5r5E8mBQ== 0000950130-98-000212.txt : 19980119 0000950130-98-000212.hdr.sgml : 19980119 ACCESSION NUMBER: 0000950130-98-000212 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980116 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980116 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MBIA INC CENTRAL INDEX KEY: 0000814585 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 061185706 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09583 FILM NUMBER: 98508558 BUSINESS ADDRESS: STREET 1: 113 KING ST CITY: ARMONK STATE: NY ZIP: 10504 BUSINESS PHONE: 9142734545 MAIL ADDRESS: STREET 1: 113 KING ST CITY: ARMONK STATE: NY ZIP: 10504 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________ Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: January 16, 1998 Date of Earliest Event Reported: January 16, 1998 MBIA Inc. - ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Connecticut 1-9583 06-1185706 --------------- ---------------------- --------------- (State of (Commission File Number) (IRS Employer Incorporation) Identification Number) 113 King Street, Armonk, New York 10504 - ------------------------------------------ --------------- (Address of principal executive offices) (Zip Code) (914) 273-4545 - ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) Page 1 of 5 Items 1-4. Not Applicable. 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 "collars" 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 MBIA and CapMAC's joint press release dated January 16, 1998 is attached hereto as Exhibit 99 and is incorporated herein by reference. Item 6. Not Applicable. Item 7. Financial Statement and Exhibits (c) Exhibits. 2.1 Amendment No. 1, dated January 16, 1998, to the Agreement and Plan of Merger, dated as of November 13, 1997, by and among MBIA Inc., Page 2 of 5 CMA Acquisition Corporation and CapMAC Holdings Inc. 99.1 Joint Press Release of MBIA Inc. and CapMAC Holdings Inc. dated January 16, 1998. Item 8. Not Applicable. Page 3 of 5 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 hereunto duly authorized. MBIA Inc. By: /s/ LOUIS G. LENZI --------------------------------- Name: Louis G. Lenzi Title: Secretary and General Counsel Date: January 16, 1998 Page 4 of 5 EXHIBIT INDEX Exhibit No. Description - ----------- ------------------------------------------ 2.1 Amendment No. 1, dated 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 5 of 5 EX-2.1 2 AMEND. #1 TO AGREEMENT AND PLAN OF MERGER 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. 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 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 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 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 EX-99.1 3 JOINT PRESS RELEASE OF MBIA AND CAPMAC 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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----