Harbinger Group Inc.
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SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 05/09/2016
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borrowing base at such time. HGI Funding’s aggregate obligations in connection with the Initial Guarantee through the May 2016 borrowing base redetermination date are not to exceed $30.0 million. The guarantee was also amended to provide that HGI Funding may elect to guaranty an additional portion of the debt under the Compass Credit Agreement (the “Optional Guarantee”) in order to cure defaults under the Consolidated Leverage Ratio (as defined in the Compass Credit Agreement) on any test date through September 30, 2016. HGI Funding will be required to make a debt or equity contribution to Compass in the amount of the Optional Guarantee (if any) within eleven business days of the delivery of Compass' compliance certificate under the Compass Credit Agreement for the period ending September 30, 2016. The secured amount is secured by a pledge of assets chosen by HGI Funding that may consist of a combination of cash and marketable securities with a determined value equal to the maximum secured amount then applicable. In measuring the determined value of the pledged assets, cash is valued at 100.0% and marketable securities are valued at 33.3% of fair market value thereafter (measured as the 20 day average close price of such marketable securities). As of March 31, 2016, HGI Funding had no amounts in the Optional Guarantee. As of March 31, 2016, $160.0 million was drawn under the Compass Credit Agreement. The Compass Credit Agreement matures on February 14, 2018.
The expiration date of the Initial Guarantee occurs upon the closing of Compass’ scheduled borrowing base redetermination in May 2016. The expiration date of the Optional Guarantee occurs upon the making of all required payments on the Optional Guarantee payment date. Compass is presently current on all obligations related to the Compass Credit Agreement.

Spectrum Brands
Spectrum Brands expects to fund its cash requirements, including capital expenditures, dividend, interest and principal payments due during the remainder of fiscal year 2016 through a combination of cash on hand ($133.3 million at March 31, 2016), cash flows from operations and $325.0 million available borrowings under the asset based lending revolving credit facility (the “Revolver Facility”). Spectrum Brands expects its capital expenditures for fiscal year 2016 will be approximately $110.0 million to $120.0 million. Going forward, its ability to satisfy financial and other covenants in its senior credit agreements and senior unsecured indentures and to make scheduled payments or prepayments on its debt and other financial obligations will depend on its future financial and operating performance. There can be no assurances that its business will generate sufficient cash flows from operations or that future borrowings under Spectrum Brands’ debt agreements, including the Revolver Facility, will be available in an amount sufficient to satisfy its debt maturities or to fund its other liquidity needs.
From time to time we or Spectrum Brands may purchase outstanding securities of Spectrum Brands or its subsidiaries, in the open market or otherwise.

Front Street
Funds withheld receivables
Front Street Cayman has entered into various reinsurance agreements on a funds withheld basis, meaning that funds are withheld by the ceding company, from the coinsurance premium owed to Front Street Cayman as collateral for Front Street Cayman’s payment obligations. Accordingly, the collateral assets remain under the ultimate ownership for the ceding company. Front Street Cayman’s investment portfolio underlying the funds withheld assets includes fixed maturities and short-term investments that are recorded at fair value, and other invested assets. The carrying values of the investments underlying the funds withheld receivables at March 31, 2016 and September 30, 2015 were as follows (in millions):
 
 
March 31, 2016
 
September 30, 2015
Asset Class
 
Fair Value
 
Percent
 
Fair Value
 
Percent
Corporates
 
$
1,072.2

 
67.3
%
 
$
1,083.0

 
66.1
%
Asset/Mortgage-backed securities
 
360.8

 
22.6
%
 
395.1

 
24.1
%
Municipals
 
90.6

 
5.7
%
 
100.9

 
6.2
%
Preferred stock
 
39.0

 
2.5
%
 
39.3

 
2.4
%
Government bonds
 
19.5

 
1.2
%
 
8.4

 
0.5
%
Agency bonds
 
11.6

 
0.7
%
 
11.4

 
0.7
%
Total fixed maturity securities
 
1,593.7

 
100.0
%
 
1,638.1

 
100.0
%
Accrued interest
 
19.5

 
 
 
20.5

 
 
Net cash, receivables (payables)
 
57.0

 
 
 
41.1

 
 
Policy loans and other
 
9.2

 


 
10.4

 
 
Total investments
 
$
1,679.4

 
 
 
$
1,710.1

 
 
The decrease in the fair value of the funds withheld receivables at March 31, 2016 compared to September 30, 2015 was primarily related to unrealized losses on the underlying debt securities included in the funds withheld receivables during the Fiscal 2016

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