Fairfax Announces Pricing for Offering of Senior Notes and

TORONTO, June 18, 2024 (GLOBE NEWSWIRE) — Fairfax Financial Holdings Limited (“Fairfax”) (TSX: FFH and FFH.U) announces that it has priced a private placement of US$600,000,000 of senior notes due 2055 (the “New Notes”) at an issue price of 99.585% and a private offering of an additional US$150,000,000 of its 6.000% senior notes due December 7, 2033 (the “Supplemental 2033 Notes”). » and, with the new notes, the “Notes”) at the issue price of 102.697%, plus accrued interest. The new notes will constitute unsecured obligations of Fairfax and will pay a fixed interest rate of 6.100% per annum.

Fairfax currently has US$600,000,000 aggregate principal amount outstanding of its 6.000% Senior Notes due 2033 (the “2033 Initial Notes”). The additional 2033 Notes will have the same terms as the original 2033 Notes, except the date of issuance, the offering price and the first interest payment date, and will be in the same series as the Notes 2033 originals.

Fairfax intends to use the net proceeds from this offering to repurchase the entire outstanding aggregate principal amount of US$500,000,000 of the outstanding 4.35% senior notes of Allied World Assurance Company Holdings, Ltd. maturing in 2025 and using the remainder for general corporate purposes. Fairfax also intends to enter into a registration rights agreement in connection with the offering of the Notes. The offering is expected to close on or about June 24, 2024, subject to compliance with customary conditions.

The offering is being made solely by means of a private placement either to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or to certain non-U.S. persons in offshore transactions in accordance with Regulation S under the Securities Act. The Notes have not been registered under the Securities Act and the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Notes have not been and will not be eligible for sale under the securities laws of any province or territory of Canada and may not be offered or sold directly or indirectly in Canada or to or for for the benefit of a resident of Canada, except in accordance with applicable prospectus exemptions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offering of Notes will be made only by means of a private offering memorandum.

Fairfax is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and related investment management.

Forward-looking information

Certain statements contained herein may constitute “forward-looking statements” and are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities regulations. These forward-looking statements may include, among other things, the anticipated use of the net proceeds from the offering of the Notes and the anticipated consummation of the offering of the Notes. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Fairfax to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. . . These factors include, but are not limited to: our ability to complete acquisitions and other strategic transactions on the terms and timelines contemplated, and to realize the anticipated benefits therefrom; a reduction in net income if our loss reserves are insufficient; underwriting losses on the risks we insure are higher than expected; the occurrence of catastrophic events whose frequency or severity exceeds our estimates; changes in market variables, including adverse changes in interest rates, foreign exchange rates, stock prices and credit spreads, which could adversely affect our results of operations and our portfolio of assets investments; insurance market cycles and general economic conditions, which may materially influence our and our competitors’ premium rates and our ability to write new business; insufficient reserves for asbestos, environmental and other latent claims; exposure to credit risk in the event our reinsurers fail to make payments to us under our reinsurance agreements; exposure to credit risk in the event that our policyholders, insurance producers or reinsurance intermediaries fail to remit premiums owed to us or our policyholders fail to reimburse us for deductibles we pay on their behalf; our inability to maintain our long-term debt ratings, the inability of our subsidiaries to maintain our financial or claims-paying ratings and the impact of a downgrade in those ratings on derivative transactions that we or our subsidiaries we concluded; risks associated with the implementation of our business strategies; the timing of claims payments being earlier or receipt of sums recoverable by reinsurance being later than anticipated; the risks associated with any use we may make of derivative instruments; the failure of any hedging method we may employ to achieve the desired risk management objective; a decrease in the level of demand for insurance or reinsurance products, or increased competition in the insurance industry; the impact of new claims and coverage issues or the failure of any of the loss mitigation methods we employ; our inability to access liquidity from our subsidiaries; an increase in the amount of capital that we and our subsidiaries are required to maintain and our inability to obtain required levels of capital on favorable terms, if at all; loss of key employees; our inability to obtain reinsurance coverage in sufficient amounts, at reasonable prices or on terms that adequately protect us; the adoption of laws subjecting our operations to additional adverse requirements, supervision or regulation, including additional tax regulation, in the United States, Canada or other jurisdictions in which we operate; risks associated with applicable laws and regulations relating to sanctions and corrupt practices in foreign jurisdictions in which we operate; risks associated with government investigations, litigation and negative publicity related to insurance industry practices or other conduct; risks associated with political and other developments in foreign jurisdictions in which we operate; risks associated with legal or regulatory proceedings or significant litigation; failures or security breaches of our information technology and data processing systems; the influence that may be exercised by our significant shareholder; adverse fluctuations in foreign currency exchange rates; our dependence on independent brokers over which we exercise little control; operational, financial information and other risks associated with IFRS 17 – Insurance Contracts; financial reporting risks related to deferred taxes associated with amendments to IAS 12 – Income Taxes; impairment of the carrying value of our goodwill, our indefinite-lived intangible assets or our interests in associated companies; our inability to realize deferred tax assets; a technological or other change which has a negative impact on the demand for, or the premiums payable, for the insurance cover we offer; disruptions to our IT systems; shared assessments and market mechanisms that could harm our insurance subsidiaries; risks associated with conflicts in Ukraine and Israel and developments in other geopolitical events and economic disruptions around the world; and risks associated with recent events in the banking sector. Additional risks and uncertainties are described in our most recently published annual report, available at: www.fairfax.ca, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov, and in our base shelf prospectus (under “Risk Factors”) filed with Canadian securities regulators, which is available on SEDAR+ at www.sedarplus.ca. Fairfax disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.