March 1, 2005
By Facsimile (917) 735-3694 and U.S. Mail
Susan J. Sutherland, Esquire
Skadden, Arps, Slate, Meagher & Flom, LLP
Four Times Square
New York, New York 10036
Re: Ohio Casualty Corporation
Schedule TO-I filed on February 22, 2005
File No. 005- 33756
Dear Ms. Sutherland:
We have the following comments on the above referenced
filing. Please understand that the purpose of our review process is
to assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome any
questions you may have about our comments or on any other aspect
of our review. Feel free to call us at the telephone numbers listed
at the end of this letter.
Schedule TO
General
1. We note that some of the disclosure required by Schedule TO
only appears in the schedule itself and not in the Offering Memorandum.
For example, it does not appear that the information required by
Item 3 of Schedule TO is included in your Offering Memorandum.
Accordingly, please revise your Offering Memorandum to include all
information contained in the Schedule TO. See Rule 14d-6(d).
Item 7. Source and Amount of Funds or Other Consideration
2. You disclose that the information required by Item 7 of
Schedule TO is contained in the section captioned "The Exchange Offer."
However, it does not appear that you disclose the source and total
amount of funds to be used in this transaction. See Item 1007(a)
of Regulation M-A. Please revise. Also, to the extent that there
are material conditions to the financing or you are borrowing all or a
portion of the funds necessary in this offering, please disclose.
See Item 1007(b) and (d) of Regulation M-A.
Offering Memorandum
General
3. We note that your letter of transmittal states that by
executing and delivering the letter, the note holder waives any and all
rights with respect to the old notes tendered and releases and discharges
Ohio Casualty and the Trustee with respect to the old notes from
any and all claims such holder may have, now or in the future, arising
out of the old notes. Please revise your Offering Memorandum to
include corresponding disclosure about the potential claims being
given up by note holders tendering in this offer.
Cover Page
4. In the second to last paragraph on the cover page, you state
that Ohio Casualty may terminate the exchange offer in your sole
discretion. Since you do not reference the occurrence of any
listed offer condition, this language seems to imply that you may
terminate the offer at will in your sole discretion and for any reason.
Please note that it is our view that you may terminate the offer only if
one of the listed offer conditions so permits. Please confirm your
understanding supplementally, and revise any contrary disclosure
in the Offering Memorandum.
Where You Can Find More Information, page iii
5. We note that you are attempting to incorporate by reference
future documents filed between the date of the Offering Memorandum and
the earlier of the expiration date or termination of your exchange
offer. However, Schedule TO does not permit this "forward" incorporation
by reference. If the information provided to note holders in the
offering document materially changes, you are under an obligation
to amend the Schedule TO and to disseminate the new information to
unit holders in a manner reasonably calculated to inform them about the
change. If you would like to incorporate by reference to periodic
reports that you file before the offer expires or terminates, you
must amend the offer materials to specifically reference each such
report. Please revise the disclosure in this Section accordingly.
Forward-Looking Statements and Information, page iv
6. Statements made in connection with tender offers are
Specifically excluded from the safe harbor protections of the Private
Securities Litigation Reform Act of 1995. See Section 21E(b)(1)(E)
of the Exchange Act of 1934 and the Exchange Act and Regulation M-A
telephone interpretation M.2 of the July 2001 Supplement.
Accordingly, please remove your references to the Reform Act. In
the alternative, clearly disclose that the safe harbor protections in
the Reform Act do not apply to disclosure in the Offering Memorandum
or any other tender offer materials, including press releases that
are issued in association with your tender offer.
Summary Term Sheet
Why are we making the Exchange Offer?
7. We note that you believe that the "net share settlement
modification will enable you to facilitate, in the most economical
manner, the redemption of the new notes, which [you] believe will
allow [you] to achieve [y]our target capital structure." To
better explain the purpose of this exchange offer, please disclose how
the net settlement modification will facilitate the redemption of your
notes and describe the "target capital structure" that you hope to
achieve. Are there other benefits to Ohio Casualty that result
from redeeming the new notes rather than the old notes?
8. You disclose that the purpose of the exchange offer is to
change certain terms of the old notes by completing the exchange offer
and issuing new notes. Although you provide a detailed description of
the new notes, your disclosure does not identify the specific
terms of the old notes that differ from new notes. Please revise to
briefly identify the provisions of the old notes that have been
changed in the new notes and disclose how the notes differ. Also,
to the extent that the changes between the old and new notes address
conversion and redemption, explain how note holders participating
in the exchange offer will be impacted as a result of the differing
provisions. This expanded discussion should address the
differences to holders of old and new notes upon redemption, which you
expect to effect soon after completion of this exchange offer.
Risk Factors, page 19
Risks Related to the New Notes, page 19
9. Your current disclosure describes risks associated with the new
notes only. Include a section or sections specifically contrasting
any new risks associated with the new notes that are different
from those pertaining to the old notes.
10. Describe the effect on Ohio Casualty`s liquidity and capital
resources from the cash settlement provision of the new notes, and
discuss how the company reasonably expects to finance the cash
required.
The Exchange Offer, page 50
Securities Subject to the Exchange, page 50
11. Here or where appropriate in the Offering Memorandum, give an
example of what the effect on 2004 reported earnings per share
would be if the exchange offer were not consummated.
Conditions, page 51
12. Refer to the introductory paragraph in this section. It is not
clear under what circumstances you could "postpone" the acceptance
of old notes, other than through an extension of the offer, which you
address separately. Please revise or clarify.
13. All offer conditions must be clearly and specifically
described in the offer materials and must be outside of the company`s
control. In this regard, please revise to quantify the "significant
change" in the price of the old notes and the "material impairment"
in the debt markets generally that would allow you to terminate the
exchange offer.
14. The second to last bullet point refers to "a commencement or
significant worsening of a war or armed hostilities or other
national or international calamity, including but not limited to,
additional catastrophic terrorist attacks against the United States
or its citizens." Given the current situation in Iraq, Afghanistan,
and Israel, we are concerned that your offer condition is drafted so
broadly and generally as to make it difficult to determine whether
it has been "triggered" by events as they occur. Please tailor your
conditions so that security holders may objectively verify when
this condition has been triggered. For example, are these conditions
implicated only if any such event has a material adverse effect on
the company?
15. Refer to our last comment above. As we note, it is difficult
for a note holder to assess whether events as they occur have
"triggered" an offer condition which would allow the company to
terminate this offer. If an event occurs while this offer is pending
that you believe impacts an offer condition, it is our position that the
company must promptly inform security holders whether it intends
to waive the relevant offer condition, or terminate the offer. You
may not wait until the offer expires to terminate it based on an event
that occurred early in the offer period. Please confirm your
understanding supplementally.
16. You state that you may waive any condition in whole or in part.
Explain how you waive an offer condition "in part" or revise this
language. If you elect to revise, please make corresponding
changes to the same language in your letter of transmittal.
Expiration Date; Extensions; Amendments; Termination, page 52
17. We refer you to your disclosure regarding material changes.
Please revise to indicate the period of time you are required to
extend the offering in the event that there is a change in price.
Closing Comments
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be certain that they have provided all information investors require
for an informed decision. Since the issuer is in possession of all
facts relating to its disclosure, it is responsible for the accuracy
and adequacy of the disclosures it has made.
In connection with responding to our comments, please
provide, in writing, a statement from Ohio Casualty Corporation
acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of the Division of Corporation Finance in our review of your filing
or in response to our comments on your filing.
As appropriate, please amend your document in response to
these comments. You may wish to provide us with marked copies of the
amendment, if required, to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.
Please file your cover letter on EDGAR. Please understand
that we may have additional comments after reviewing your amendment
and responses to our comments. In addition, depending upon your
response to these comments, a supplement may need to be sent to
security holders.
Please direct any questions to me at (202) 942-1957. You
may also contact me via facsimile at (202) 942-9638. Please send all
correspondence to us at the following ZIP code: 20549-0303.
Very truly yours,
Jeffrey B. Werbitt
Attorney-Advisor
Office of Mergers and
Acquisitions