Zurich Insurance Group (Zurich) today announced the successful placement of dated subordinated notes (the “Notes”) in an amount of EUR 788 million. The Notes will mature in October 2043 and are first callable in October 2023. The transaction was primarily targeted at European institutional investors.
The Notes will be issued by Zurich Insurance Company Ltd to a repackaging vehicle (Aquarius + Investments plc, Dublin). The repackaging vehicle in turn issues notes to investors that are secured by the Notes. The annual coupon is fixed at 4.25% until the first call date. Thereafter, the holders of the Notes will receive a floating coupon.
Simultaneously with the new issuance investors who held the Zurich Finance (USA), Inc. EUR 500 million dated subordinated notes due 2025 were offered to switch part or all of their holdings for the Notes. The total nominal amount of the 2025 notes switched was EUR 82 million for which those investors received EUR 88 million of the Notes which reflects the offered switch price.
The Notes are expected to be treated as capital from a regulatory and rating agency perspective to the extent permissible. The transaction has been conducted for general corporate purposes and to address refinancing needs in 2013.
