UNITED STATES
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 (Date of earliest Commission File Number
event reported): 1-8233
October 28, 1994
USF&G CORPORATION
(Exact Name of Registrant as Specified in Charter)
Maryland 52-1220567
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
100 Light Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices)
(410) 547-3000
(Registrant's telephone number, including area code)
USF&G CORPORATION
FORM-8K
______________________
Item 5. Other Events
On October 28, 1994, USF&G issued a press release announcing
its call for redemption on November 28, 1994, of approximately 1,400,000
shares, or 50 percent, of its remaining outstanding $5.00 Series C
Cumulative Preferred Stock. The press release is
incorportated herein by reference as Exhibit I to this form.
EXHIBIT I
October 28, 1994
FOR IMMEDIATE RELEASE
CONTACT: Kerrie Burch-DeLuca
(410) 547-3573
USF&G CORPORATION CALLS 1,400,000 SHARES OF $5.00
SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK
USF&G Corporation today announced its call for redemption
on November 28, 1994, of approximately 1.4 million shares or 50
percent of its outstanding $5.00 Series C Cumulative Convertible
Preferred Stock ("Series C", ticker:FGpC) at a redemption price of
$53.50 per share plus accrued dividends of $0.39. USF&G currently
has 2.8 million shares of the Series C outstanding. First Chicago
Trust Company of New York, transfer agent, has determined the
shares to be called by lot. All holders of record will be notified
of the number of Series C shares, if any, that have been called.
USF&G Corporation issued the Series C in June 1991 at the
outset of its significant financial and operational restructuring.
On September 28, 1994, the company completed the call of 950,000
shares of the original total of 3.8 million shares of the Series C,
resulting in a significant percentage of shares called converting to
common stock. Given the improvement in the company's overall
financial position and its return to profitability, USF&G has chosen
to continue to retire this high-coupon (10 percent) preferred stock.
This transaction, together with the previous call, is
expected to produce annual cash dividend savings of approximately
$10 million.
At the holder's option, the Series C shares called for
redemption are convertible into 4.158 shares of USF&G common stock
until the redemption date, November 28, 1994, at which time this
option will expire. As long as the common stock price is greater
than $12.96, holders of the Series C who convert will receive USF&G
common stock (plus cash for fractional shares) with market value
greater than the amount of cash that the holder would otherwise be
entitled to receive upon redemption. USF&G's common stock closed at
$14.00 per common share on the New York Stock Exchange on October
27, 1994.
Shares of the Series C not called for redemption are also
convertible into common stock at any time at the holder's option.
USF&G has, as with the previous transaction, entered into
an agreement with an unaffiliated financial institution to place
common stock to fund cash redemptions, if necessary. At September
30, 1994, there were approximately 89.3 million shares of common
stock outstanding. As a result of this transaction, USF&G will
issue approximately 5.8 million additional common shares either
through conversions into common stock or these arrangements.
Baltimore-based USF&G Corporation, with assets of $13.8
billion, is composed of property/casualty and life insurance
subsidiaries. The corporation's principal operating subsidiary is
the United States Fidelity and Guaranty Company, one of the nation's
largest property/casualty insurers, founded in 1896.
USF&G CORPORATION
FORM 8-K
______________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned hereunto duly authorized.
USF&G CORPORATION
By: DAN L. HALE
Dan L. Hale
Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer
October 28, 1994