(THE CINCINNATI INSURANCE COMPANY LOGO}
CINCINNATI FINANCIAL CORPORATION
Mailing Address: P.O. BOX 145496
CINCINNATI, OHIO 45250-5496
(513) 870-2000
Investor Contact: Heather J. Wietzel
(513) 603-5950
Media Contact: Joan O. Shevchik
(513) 603-5323
CINCINNATI FINANCIAL CORPORATION ANNOUNCES PRICING OF DEBT OFFERING
CINCINNATI, OCTOBER 27, 2004 -- CINCINNATI FINANCIAL CORPORATION (NASDAQ: CINF)
today announced the pricing of its offering of $375 million aggregate principal
amount of 6.125% senior notes due November 2034. Cincinnati Financial
Corporation intends to use the net proceeds as follows: (i) approximately $58
million will be used to pay the entire outstanding balance under its line of
credit; (ii) approximately $128 million will be paid to The Cincinnati Insurance
Company to satisfy an outstanding intercompany debt; (iii) approximately $100
million will be used beginning in 2005 to finance the construction of a parking
garage and office building to be situated at its headquarters located in
Fairfield, Ohio; and (iv) remaining net proceeds will be used for general
corporate purposes. The company increased the size of the offering to $375
million from the previously announced $350 million.
The notes were offered only to qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933, as amended (Securities Act).
Cincinnati Financial Corporation offers property and casualty insurance, its
main business, through The Cincinnati Insurance Company, The Cincinnati
Indemnity Company and The Cincinnati Casualty Company. The Cincinnati Life
Insurance Company markets life and disability income insurance and annuities.
CFC Investment Company supports the insurance subsidiaries and their independent
agent representatives through commercial leasing and financing activities.
CinFin Capital Management Company provides asset management services to
institutions, corporations and individuals.
This news release does not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of the notes referred to herein in any
state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state. The
notes will not be registered under the Securities Act or applicable state
securities laws, and the initial purchasers are offering them only to qualified
institutional buyers in reliance on Rule 144A under the Securities Act. Unless
so registered, the notes may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities
laws.
This is a "Safe Harbor" statement under the Private Securities Litigation Reform
Act of 1995. Certain forward-looking statements contained herein involve
potential risks and uncertainties. Our future results could differ materially
from those discussed. Factors that could cause or contribute to such differences
include, but are not limited to:
- unusually high levels of catastrophe losses due to changes in
weather patterns, environmental events, terrorism incidents or
other causes
- ability to obtain adequate reinsurance on acceptable terms,
amount of reinsurance purchased and financial strength of
reinsurers
- increased frequency and/or severity of claims
- events or conditions that could weaken or harm our
relationships with our independent agencies and hamper
opportunities to add new agencies, resulting in limitations on
our opportunities for growth, such as:
o downgrade of our financial strength ratings
o concerns that doing business with us is too difficult
or
o perceptions that our level of service, particularly
claims service, is no longer a distinguishing
characteristic in the marketplace
- insurance regulatory actions, legislation or court decisions
or legal actions that increase expenses or place us at a
disadvantage in the marketplace
- delays in the development, implementation, performance and
benefits of technology projects and enhancements
- inaccurate estimates or assumptions used for critical
accounting estimates, including loss reserves
- results and timely completion of assessment and remediation of
internal controls for financial reporting under the
Sarbanes-Oxley Act of 2002
- recession or other economic conditions or regulatory,
accounting or tax changes resulting in lower demand for
insurance products
- sustained decline in overall stock market values negatively
affecting our equity portfolio, in particular a sustained
decline in the market value of Fifth Third Bancorp shares, a
significant equity holding
- events that lead to a significant decline in the market value
of a particular security and impairment of the asset
- prolonged low interest rate environment or other factors that
limit our ability to generate growth in investment income
- adverse outcomes from litigation or administrative proceedings
- effect on the insurance industry as a whole, and thus on our
business, of the suit brought by the Attorney General of the
State of New York against participants in the insurance
industry, as well as any increased regulatory oversight that
might result from the suit
- limited flexibility in conducting investment activities if the
restrictions imposed by the Investment Company Act of 1940
become applicable to us.
Further, our insurance businesses are subject to the effects of changing social,
economic and regulatory environments. Public and regulatory initiatives have
included efforts to adversely influence and restrict premium rates, restrict the
ability to cancel policies, impose underwriting standards and expand overall
regulation. We also are subject to public and regulatory initiatives that can
affect the market value for our common stock, such as recent measures affecting
corporate financial reporting and governance. The ultimate changes and eventual
effects, if any, of these initiatives are uncertain.
Readers are cautioned that we undertake no obligation to review or update the
forward-looking statements included in this material.
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