Liberty Mutual Group Inc. and Libery Mutual Insurance Company Announce Expiration and Final Results of Cash Tender Offers

BOSTON, May 16 -- Liberty Mutual Group issued the following news release:

Liberty Mutual Group Inc. ("LMGI") and Liberty Mutual Insurance Company ("LMIC" and, together with LMGI, the "Issuers") today announced the expiration and final results of their previously announced cash tender offer (the "Dutch Auction Offer") to purchase LMGI's 10.75% Series C Junior Subordinated Notes due 2088 (the "Hybrid Notes") and LMIC's 7.697% Surplus Notes due 2097 (the "Surplus Notes" and, together with the Hybrid Notes, the "Dutch Auction Notes").

LMGI also announced the expiration and final results of its previously announced cash tender offer (the "Waterfall Offer" and, together with the Dutch Auction Offer, the "Offers") to purchase its 5.75% Senior Notes due 2014 (the "5.75% Notes") and 7.30% Senior Notes due 2014 (the "7.30% Notes" and, together with the 5.75% Notes, the "Waterfall Notes"). The Dutch Auction Notes and the Waterfall Notes are collectively referred to as the "Notes."

The terms and conditions of the Offers are described in the offer to purchase dated April 18, 2012 (as modified by the Supplement dated May 2, 2012, the "Offer to Purchase") and the related letter of transmittal (the "Letter of Transmittal" and, together with the Offer to Purchase, the "Offer Documents"), previously sent to holders of the Notes.

The final results and select terms of the Offers are described in the table below.

See table here: (http://www.libertymutualgroup.com/omapps/ContentServer?fattribute=cms_attribute&c=cms_document&pagename=LMGNews%2Fcms_document%2FShowDoc&fnameprefix=cms&cid=1240009225670)

The Issuers exercised their early settlement right for all Notes validly tendered at or prior to the Early Tender Time and accepted for purchase and settled such Notes on the Early Settlement Date of May 7, 2012.

As previously announced, the Issuers amended the Dutch Auction Offer such that (i) any Dutch Auction Notes tendered after the Early Tender Time and at or prior to the Expiration Time would be deemed tendered at a bid price which results in a bid premium equal to $57.50 and the Issuers would purchase such Dutch Auction Notes on a pro rata basis, such that the total cash expenditure of the purchase of such Dutch Auction Notes would not exceed $175,000,000, plus Accrued Interest and (ii) the Late Tender Offer Consideration, which was previously defined as the applicable Full Tender Offer Consideration minus the applicable Early Tender Payment, would be equal to the applicable Full Tender Offer Consideration for the Dutch Auction Notes. As a result, the Late Tender Offer Consideration for the Hybrid Notes is $1,397.50 and the Late Tender Offer Consideration for the Surplus Notes is $1,007.50.

All Dutch Auction Notes validly tendered after the Early Tender Time have been accepted for purchase. The Final Settlement Date of such Notes is expected to be today.

2 As previously announced by LMGI, the Waterfall Tender Cap was reached as of the Early Tender Time; therefore, no additional Waterfall Notes have been accepted for purchase.

Capitalized terms used in this press release and not defined herein have the meanings given to them in the Offer to Purchase.

BofA Merrill Lynch and J.P. Morgan Securities LLC acted as dealer managers for the Offers. Global Bondholder Services acted as the depositary and information agent for the Offers.

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