National Life Insurance Company Announces Launch of Private Exchange Offer for Any and All of Its Outstanding 10.50% Surplus Notes Due 2039

Montpelier, VT -  (July 11, 2018)  National Life Insurance Company (“National Life”) today announced that it has commenced an offer to exchange (the “Exchange Offer”) any and all of National Life’s outstanding 10.50% Surplus Notes due 2039 (the “Existing Surplus Notes”) held by Eligible Holders, as defined below, for National Life’s 5.250% Fixed-to-Floating Rate Surplus Notes due 2068 (the “New 2068 Surplus Notes”).

¹ Includes $10.9 million in aggregate principal amount of Existing Surplus Notes currently held by National Life.

The New 2068 Surplus Notes being offered in the Exchange Offer will be a further issuance of, and will be in addition to, the previously announced 5.250% Fixed-to-Floating Rate Surplus Notes due 2068 which National Life expects to issue for cash on July 19, 2018 in the aggregate principal amount of $350,000,000 (the “Original 2068 Surplus Notes”). The New 2068 Surplus Notes are expected to constitute a further issuance of, and will form a single series with, the Original 2068 Surplus Notes.

The Exchange Offer is being made solely to Eligible Holders upon the terms and subject to the conditions set forth in the confidential offering memorandum (the “Offering Memorandum”), and the related letter of transmittal (the “Letter of Transmittal”) and notice of guaranteed delivery (the “Notice of Guaranteed Delivery”, and collectively with the Offering Memorandum and the Letter of Transmittal, the “Exchange Offer Materials”), each dated July 10, 2018.

The Exchange Offer is being made only (a) in the United States, to holders of Existing Surplus Notes who are “qualified institutional buyers,” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and (b) outside the United States, to holders of Existing Surplus Notes who are not “U.S. persons,” as defined in Rule 902 under the Securities Act.  We refer to the holders of Existing Surplus Notes who have certified that they are eligible to participate in the Exchange Offer pursuant to at least one of the foregoing conditions as “Eligible Holders.”

Upon the terms and subject to the conditions of the Exchange Offer, Eligible Holders that validly tender, and do not validly withdraw, their Existing Surplus Notes at or prior to 5:00 p.m., New York City Time, on July 17, 2018 (the “Expiration Time”), or in connection with the guaranteed delivery procedures set forth in the Exchange Offer Materials, and whose tenders are accepted for exchange by National Life, will receive $1,725.00 per each $1,000 principal amount of the Existing Surplus Notes payable in principal amount of New 2068 Surplus Notes.

In addition, holders of Existing Surplus Notes validly tendered (and not validly withdrawn) in the Exchange Offer will receive on the settlement date accrued and unpaid interest to, but not including, the settlement date in cash on all such Existing Surplus Notes validly tendered and accepted for exchange pursuant to the Exchange Offer.

Tenders of Existing Surplus Notes may be withdrawn at or prior to the Expiration Time.

Consummation of the Exchange Offer is conditioned upon the satisfaction or waiver of the conditions set forth in the Exchange Offer Materials. In addition, the Exchange Offer may be terminated or withdrawn at any time, in National Life’s sole and absolute discretion, subject to compliance with applicable law.

The complete terms and conditions of the Exchange Offer are described in the Exchange Offer Materials, copies of which may be obtained by Eligible Holders by contacting D.F. King & Co., Inc., the information and exchange agent in connection with the Exchange Offer, at (800) 967-4617 (toll-free) or (212) 269-5550 (Banks and Brokers) or by visiting www.dfking.com/nli to complete the eligibility process.  Holders of Existing Surplus Notes that are not Eligible Holders will not be able to receive such documents.

This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any securities.  The Exchange Offer is being made and the New 2068 Surplus Notes are being offered only to “qualified institutional buyers” and holders that are not “U.S. persons” as such terms are defined under the Securities Act.  The New 2068 Surplus Notes have not been registered under the Securities Act or under any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act, and, accordingly, are subject to significant restrictions on transfer and resale as more fully described in the Exchange Offer Materials.  The Exchange Offer is subject to the terms and conditions set forth in the Exchange Offer Materials.  

About National Life
National Life Insurance Company (National Life) is a life insurance company founded in 1848 in Montpelier, Vermont and licensed to conduct business in all 50 states and the District of Columbia. National Life operates as a unified organization under the trade name of National Life Group, which includes National Life, Life Insurance Company of the Southwest, and their affiliates. National Life Group is a diversified financial services company and one of the fastest growing life insurers in the United States. Its offerings include traditional whole life, term life, fixed interest universal life, indexed universal life, variable universal life, variable annuities, fixed interest rate annuities and fixed indexed annuities. The company has a combined life insurance in-force of $123.9 billion (before reinsurance ceded) and annuity account value under management of $13.8 billion.

Forward-Looking Statements
This press release may contain “forward-looking statements.”  These forward-looking statements include, but are not limited to, the completion of the proposed offering of Original 2068 Surplus Notes, the satisfaction of the conditions to the Exchange Offer and the completion of the proposed Exchange Offer.  Forward-looking statements include, but are not limited to, statements that represent National Life’s beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as “may,” “expects,” “should” or similar expressions. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond National Life’s control or are subject to change, actual results could be materially different and National Life’s results of operations, its financial condition and its liquidity could be adversely affected. Consequently, such forward-looking statements should be regarded solely as National Life’s current plans, estimates and beliefs. National Life does not intend, and does not undertake, any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

Contact: Ross Sneyd, corporate communications, National Life Group, 802.229.3866

National Life Group® is a trade name of National Life Insurance Company, founded in Montpelier, Vt., in 1848, Life Insurance Company of the Southwest, Addison, Texas, chartered in 1955, and their affiliates.  Each company of National Life Group is solely responsible for its own financial condition and contractual obligations.  Life Insurance Company of the Southwest is not an authorized insurer in New York and does not conduct insurance business in New York.