On 10 September 2003 Aviva plc (Aviva) announced that it intended to raise around £1.2 billion of subordinated debt to support future growth and enhance further the group’s capital position. Aviva now confirms that due to very strong investor demand, after a European-wide roadshow, it will raise a total amount equivalent to £1.6 billion.
On 10 September 2003 Aviva plc (Aviva) announced that it intended to raise around Ł1.2 billion of subordinated debt to support future growth and enhance further the group’s capital position. Aviva now confirms that due to very strong investor demand, after a European-wide roadshow, it will raise a total amount equivalent to Ł1.6 billion.
The issue, which will be denominated in sterling and euros, was priced on Friday 19 September and is due for settlement on 29 September 2003.
The issue included a €650 million Euro 20-year dated tranche callable in 2013 priced at a fixed rate of 5.25% (based on a spread of 108 basis points over the Euro ten-year mid-swap rate); a €500 million Euro perpetual tranche callable in 2015 priced at a fixed rate of 5.70% (based on a spread of 135 basis points over the Euro twelve-year mid-swap rate); and a Ł800m Sterling perpetual tranche callable in 2022 priced at a fixed rate of 6.125% (based on a spread of 140 basis points over the 8% Gilt due 2021).
The transaction is expected to be rated A-/A2 by Standard and Poor’s and Moody’s respectively and will be listed on the London Stock Exchange.
Mike Biggs, Aviva’s group finance director, commented: “We have seen very strong demand for our subordinated debt issue from investors in the UK and Continental Europe. The issue was three times oversubscribed enabling us to achieve very attractive pricing. This is cost effective long-term core capital for the group.”
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Notes to editors:
- Aviva is the UK’s largest insurance group and the world’s seventh-largest insurer based on worldwide gross written premiums.
- The joint bookrunners for the subordinated debt issue were Barclays Capital, Goldman Sachs, Lehman Brothers and SG Corporate & Investment Banking.