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Get filing alertsUniversal Insurance refinances $100M debt at 7.75%, extending maturity to 2031
Filed June 18, 2026 · Period ending June 16, 2026 · ~1 min read
Key Changes
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high
Issued $100M of 7.75% senior unsecured notes due 2031, replacing 5.625% notes due 2026—interest rate increases 212.5 basis points while extending maturity five years.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
medium
New notes require maintaining cash equal to twelve months of interest payments and keeping total debt below 40% of capitalization, restricting financial flexibility.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
medium
Interest rate adjusts based on credit rating changes—downgrades increase borrowing costs, upgrades reduce them.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
medium
Company cannot pay dividends to shareholders during any event of default on the notes.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
medium
Redeemed all outstanding 2026 Notes at par plus accrued interest on June 17, 2026.
Item 8.01 — Other Events verify on EDGAR →
Summary
Universal Insurance refinanced its debt by issuing $100 million of 7.75% senior unsecured notes due 2031 and redeeming its existing 5.625% notes due 2026. The refinancing extends the maturity by five years but increases the interest rate by 212.5 basis points, raising annual interest expense by approximately.
The new notes include financial covenants requiring the company to maintain cash equal to twelve months of interest payments and keep total debt below 40% of capitalization—restrictions that could limit future borrowing or dividend capacity if violated. For shareholders, the higher interest rate reflects current market conditions and the company's credit profile.
The interest rate can adjust based on rating changes, creating a direct link between credit quality and borrowing costs. Notably, the company cannot pay dividends during any default period, though this is a standard creditor protection. The refinancing is a routine capital structure management action that trades near-term maturity risk for higher ongoing interest expense.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
the Company shall maintain cash on hand at least equal to the next twelve months of interest payments on the Notes so long as the Notes remain outstanding; • the Company must maintain Total Consolidated Indebtedness to Total Consolidated GAAP Capitalization (as these terms are defined in the Indenture) less than or equal to 40%, as of the end of each calendar quarter;
The new notes impose financial covenants requiring the company to maintain cash equal to twelve months of interest payments and keep total debt below 40% of total capitalization. These covenants restrict financial flexibility and could limit future borrowing capacity or dividend payments if violated.
Added in current filing · verify on EDGAR →
At any time and from time to time prior to June 30, 2029, the Company may, at its option, redeem all or a portion of the 2031 Notes at a redemption price equal to 100.0% of the principal amount thereof plus the Applicable Premium (as defined in the Indenture) plus accrued and unpaid interest thereon to, but not including, the redemption date. On or after June 30, 2029, the Company may redeem all or part of the 2031 Notes at redemption prices (expressed as percentages of the principal amount) equal to (i) 101.9375% for the twelve-month period beginning on June 30, 2029 to but excluding June 30, 2030 and (ii) 100.0% at any time thereafter, plus accrued and unpaid interest up to, but not including, the redemption date.
The company can redeem the notes early, but before June 2029 must pay a premium above par. From June 2029 to June 2030, redemption costs 101.9375% of principal, and thereafter at par. This provides the company flexibility to refinance if rates decline, though early redemption before 2029 would be costly.
Added in current filing · verify on EDGAR →
Upon an event of default and for as long as such event of default remains outstanding, the Company will not declare or pay any cash dividends to its stockholders.
If the company defaults on the notes, it cannot pay dividends to shareholders until the default is cured. This protects noteholders but could suspend shareholder income during periods of financial stress.
Added in current filing · verify on EDGAR →
The 2031 Notes bear interest at a rate of 7.75% per annum, subject to adjustment from time to time in the event of a downgrade or subsequent upgrade of the rating assigned to the 2031 Notes.
The 7.75% interest rate can adjust based on credit rating changes to the notes. A downgrade would increase the interest expense, while an upgrade could reduce it. This creates a direct link between the company's credit quality and its borrowing costs.
Event · Item 8.01 — Other Events
Item 8.01 — Other Events filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On June 17, 2026, the Company redeemed all of the outstanding 2026 Notes at a redemption price of 100.0% of their principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.
Universal Insurance redeemed all outstanding 2026 Notes at par (100% of principal) plus accrued interest. The redemption was conditioned on completing a private placement, which closed June 16, 2026. This is a routine debt refinancing with no premium or discount to par.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 21, 2026 · How we verify