The redemptions are part of IAG's ongoing program to refinance aspects of its debt and hybrid capital. After the respective issuer call dates, both instruments would cease to contribute to IAG's regulatory capital position under the Australian Prudential Regulation Authority's (APRA) transitional capital eligibility criteria applicable to pre-2013 issues.

The two instruments being redeemed are:

  • £100 million of subordinated term notes with a fixed interest rate of 5.625% per annum, callable on 21 December 2016; and
  • NZ$187 million of subordinated bonds with a fixed interest rate of 7.5% per annum, callable on 15 December 2016.

On a 30 June 2016 pro forma basis, redemption of the two issues (amounting to approximately $357 million at that date) would result in IAG's Prescribed Capital Amount (PCA) multiple reducing by approximately 4 basis points. IAG's PCA multiple at 30 June 2016 was 1.72.

In June 2016, IAG completed a NZ$350 million convertible term note issue which, after allowance for a reinvestment offer applicable to the NZ$ subordinated bonds, raised a net amount of NZ$212 million.

IAG - Insurance Australia Group Limited published this content on 01 November 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 01 November 2016 01:42:05 UTC.

Original documenthttp://www.iag.com.au/iag-redeem-tier-2-debt-issues

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