Liberty Mutual Group Inc. Commences Tender Offer and Consent Solicitation for Certain Outstanding Debt Securities

BOSTON--(BUSINESS WIRE)--Liberty Mutual Group Inc. (“Liberty Mutual” or the “Company”), today announced that it is commencing a cash tender offer for certain of its outstanding debt securities, which are listed in the table below (the "Junior Notes"). In conjunction with the tender offer for the Company’s 10.75% Series C Junior Subordinated Notes (the “Tender Offer”), Liberty Mutual also commenced a consent solicitation (the “Consent Solicitation”) from holders of record at 5:00 p.m. New York City time, on January 13, 2011 of its 7.500% Senior Notes due 2036 (the “Senior Notes” and together with the Junior Notes, the “Securities”) to terminate the Replacement Capital Covenants (collectively, the “RCC”) that were granted by Liberty Mutual to holders of the Senior Notes. The proposed termination of the RCC requires the consent of the holders of a majority in principal amount of the Senior Notes.

					Per $1,000 principal amount
CUSIP Numbers	Title of Security	Scheduled Maturity Date	Final Maturity Date	Principal Amount Outstanding	Full Tender Offer Consideration	Early Tender Payment	Late Tender Offer Consideration
53079EAR5 U52932AL1	10.75% Series C Junior Subordinated Notes	June 15, 2058	June 15, 2088	$1,250,000,000	$1,272.50	$50.00	$1,222.50

The terms and conditions of the Tender Offer and Consent Solicitation are described in the Offer to Purchase and related Letter of Transmittal dated January 14, 2011, and the Consent Solicitation Statement and related Letter of Consent dated January 14, 2011, which set forth the complete terms of the Tender Offer and Consent Solicitation and will be mailed to holders of the applicable Securities.

The Tender Offer will expire at 12:00 midnight, New York City time, on January 28, 2011 (the "Tender Expiration Date"), and the Consent Solicitation will expire at 5:00 p.m. New York City Time, on January 26, 2011(the "Consent Expiration Date"), in either case unless extended or earlier terminated by the Company.

Holders tendering the Junior Notes may withdraw such tendered securities at any time prior to 5:00 p.m. New York City time, on January 24, 2011. Holders of the Senior Notes may revoke their consents at any time prior to the earlier of the Consent Expiration Date and the time and date Liberty Mutual receives valid consents from holders of a majority in principal amount of the Senior Notes (the “Consent Date”), whereby Liberty Mutual will announce such receipt via a press release. The applicable withdrawal deadline with respect to the Tender Offer and Consent Solicitation may be extended by the Company for each series of Securities.

In order to be eligible to receive the full tender offer consideration (the "Full Tender Offer Consideration"), which includes a $50.00 early tender fee per $1,000 principal amount of Junior Notes (the "Early Tender Payment"), holders must validly tender, and not validly withdraw, their Junior Notes prior to 5:00 p.m., New York City time, on January 24, 2011 (the "Early Tender Date"), unless extended or earlier terminated by Liberty Mutual. Consummation of the Tender Offer is conditioned upon satisfaction or waiver of the conditions set forth in the Offer to Purchase, including receipt of valid consents from the holders of a majority in principal amount of Senior Notes to terminate the RCC.

Holders validly tendering their Junior Notes after the Early Tender Date but prior to the Tender Expiration Date will be eligible to receive an amount equal to the Full Tender Offer Consideration less the Early Tender Payment. In addition, payments for Junior Notes validly tendered will include accrued interest to but excluding the settlement date, and such payments are expected to be paid promptly after the Tender Expiration Date.

If the Company receives the consent of holders of a majority in principal amount of the Senior Notes, holders who validly deliver and do not revoke their consent by the Consent Date will be eligible to receive a consent fee of $5.00 per $1,000 principal amount of Senior Notes. If the proposed termination of the RCC is approved, the termination will be binding on all holders of the Senior Notes, including those who did not deliver their consent, however only holders validly delivering their consent will receive the consent fee.

BofA Merrill Lynch and J.P. Morgan Securities LLC are acting as dealer managers for the Tender Offer and as solicitation agents for the Consent Solicitation. For additional information regarding the terms of the Tender Offer and Consent Solicitation, please contact: BofA Merrill Lynch at [phone] (toll-free) or [phone] (collect) or J.P. Morgan Securities LLC at [phone] (toll free) or [phone] (collect). Requests for documents may be directed to Global Bondholder Services, which is acting as the depositary and information agent for the Tender Offer and Consent Solicitation, at [phone] (toll-free).

THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO PURCHASE, A SOLICITATION OF AN OFFER TO PURCHASE OR A SOLICITATION OF CONSENT WITH RESPECT TO ANY SECURITIES. THE TENDER OFFER AND CONSENT SOLICITATION ARE BEING MADE SOLELY PURSUANT TO THE OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL, AND THE CONSENT SOLICITATION STATEMENT AND RELATED CONSENT LETTER, WHICH SET FORTH THE COMPLETE TERMS OF THE TENDER OFFER AND CONSENT SOLICITATION WHICH HOLDERS OF THE SECURITIES SHOULD CAREFULLY READ PRIOR TO MAKING ANY DECISION.

About Liberty Mutual

Boston-based Liberty Mutual is a diversified global insurer and fifth largest property and casualty insurer in the U.S. based on 2009 direct written premium. The Company also ranks 71st on the Fortune 500 list of largest corporations in the U.S. based on 2009 revenue. As of December 31, 2009, Liberty Mutual had $109.5 billion in consolidated assets, $95.0 billion in consolidated liabilities and $31.1 billion in annual consolidated revenue. Liberty Mutual offers a wide range of insurance products and services, including personal automobile, homeowners, workers compensation, commercial multiple peril, commercial automobile, general liability, global specialty, group disability, assumed reinsurance, fire and surety. Liberty Mutual employs over 45,000 people in more than 900 offices throughout the world. For a full description of the Company’s business operations, products and distribution channels, please visit Liberty Mutual’s Investor Relations web site at www.libertymutual.com/investors.