SEC Filing Reveals Names of RFIG Investors


The three outside investors in Republic Financial Indemnity Group, the spin-off of Old Republic Corp.’s mortgage insurance and consumer credit indemnity business, are George Cochran, chairman, financial institutions group at Macquarie Capital Advisors; David Kimmel, managing partner of Summit Capital LLC; and James W. Schacht, president of the Schacht Group.

In addition, ORI chairman and CEO A.C. Zucaro will add the title of chairman of RFIG, while ORI corporate counsel Spencer LeRoy III will be the vice chairman.

This was some of information disclosed by ORI in the Form 10 for RFIG filed with the Securities and Exchange Commission.

ORI will retain a 371,000-share stake in RFIG after the spin-off. In a leveraged buy-out, the three investors above, plus RFIG president and CEO Christopher Nard purchased 20.6% of the equity in the company.

However, ORI has warrants to buy 18 million shares of RFIG common stock at an exercise price of $0.12 per share. According to statements made by Zucaro during a conference call, that is the same price as the LBO.

ORI added that after the spin-off it would seek to have market prices for shares of RFIG common stock quoted in the over-the-counter markets.

Fitch Ratings said the spin-off should significantly diminish liquidity concerns at ORI, as it expects the elimination of debt acceleration risk for ORI due to a default at the MI unit. If the spin-off does take place, ORI’s debt rating should be upgraded to investment grade.

Regarding ORI’s title insurance business, the rating agency said, “While capitalization remains at an acceptable level, continued growth could lead to deterioration in risk-based capital and operating leverage.”

According to figures from the American Land Title Association, Old Republic has the prime beneficiary of market share shifts in that the business as LandAmerica ran into financial difficulties and was acquired by Fidelity National Financial.


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