| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On September 10, 2021, Jackson Financial Inc. (the “Company”) borrowed an aggregate principal amount of $2.35 billion as follows:
| | • | | $1.6 billion under the $1.7 billion senior unsecured delayed draw term loan facility that matures on May 21, 2022 (the “2022 DDTL Facility”) and |
| | • | | $750 million under the $1.0 billion senior unsecured delayed draw term loan facility that matures on February 22, 2023 (the “2023 DDTL Facility”). |
The 2022 DDTL Facility and the 2023 DDTL Facility, which we refer to collectively as the “DDTL Facilities,” are described in the Company’s registration statement on Form 10, as amended (File No. 001-40274) (the “Registration Statement”). Any commitments under the DDTL Facilities in excess of the amounts borrowed were terminated in accordance with the terms of the Term Loan Agreement (as defined below).
The DDTL Facilities are governed by the Term Loan Agreement, dated as of February 22, 2021 (the “Term Loan Agreement”), as amended by Amendment No. 1, dated as of July 19, 2021 (“Amendment No. 1”), by and among the Company, the banks party thereto and Citigroup Global Markets Inc., as Administrative Agent. The descriptions of the Term Loan Agreement and Amendment No. 1 were previously reported in the Registration Statement under “Description of Certain Indebtedness.” The descriptions of the Term Loan Agreement and Amendment No. 1 are qualified in their entirety by reference to the full text of the Term Loan Agreement and Amendment No. 1, which are filed as Exhibits 10.1 and 10.2, respectively, hereto and are incorporated by reference herein.
The Company intends to contribute a majority of the proceeds from the borrowings under the DDTL Facilities to Jackson National Life Insurance Company (“JNL”) (the “Capital Contribution”). On a pro forma basis adjusted for the Capital Contribution, JNL’s estimated risk based capital ratio as of June 30, 2021 would have been within the Company’s target range of 500% to 525%. With respect to the remaining amount of proceeds from the borrowings under the DDTL Facilities, the Company intends to (i) establish a minimum liquidity buffer of at least $250.0 million at the Company, and (ii) retain the balance of the proceeds of approximately $575.0 million at the Company. With respect to items (i) and (ii), such amounts are expected be used for general corporate purposes, including interest payments and debt repayment, holding company operating expenses, payment of dividends and other distributions to stockholders, which may include stock repurchases, and capital contributions, if needed, to our insurance company subsidiaries.
| Item 3.03. | Material Modifications to Rights of Security Holdings. |
On September 9, 2021, in connection with the separation and demerger of the Company from Prudential plc and the distribution by Prudential plc to its shareholders of shares of Class A Common Stock of the Company, the Company (i) amended and restated its amended and restated certificate of incorporation and (ii) the Company’s Second Amended and Restated By-laws became effective, forms of which were previously filed as exhibits to the Registration Statement. The descriptions of the Second Amended and Restated Certificate of Incorporation and Second Amended and Restated By-laws were previously reported in the Registration Statement under “Description of Capital Stock.” The descriptions of the Company’s Second Amended and Restated Certificate of Incorporation and Second Amended and Restated By-laws
