Swiss Re Chooses London for $982 Million Hybrid Capital Placement

Swiss Re announced that it has successfully placed its inaugural Sterling benchmark hybrid capital transaction of £500 million ($982 million).

“This transaction represents financing for general corporate purposes,” said the bulletin. “The Sterling market was chosen as it provided additional investor diversification and efficient execution.”
Swiss Re explained that it structured the offering “using a repackaging vehicle (ELM B.V.), that issued notes secured over perpetual subordinated step-up loan notes issued by Swiss Reinsurance Company.”

The Company also noted that “strong demand by both UK and international institutional fixed-income investors led to an attractive pricing. For the first 12 years, the coupon was set at 6.3024 percent, equivalent to £6M Libor plus 1.12 percent. The Swiss Re loan notes qualify for favorable capital treatment by the Federal Office of Private Insurance as well as by the major rating agencies.”