QBE Insurance : Announces Pricing of US$700M of Subordinated Debt

QBE Insurance Group Limited ABN 28 008 485 014

Level 27, 8 Chifley Square, SYDNEY NSW 2000 Australia

GPO Box 82, Sydney NSW 2001

telephone + 612 9375 4444 • facsimile + 612 9231 6104

www.qbe.com

25 November 2014

The Manager

Market Announcements Office

ASX Limited

Level 4

Exchange Centre

20 Bridge Street

SYDNEY NSW 2000

Dear Sir/Madam

Please find attached an announcement for release to the market. Yours faithfully,

Peter Horton

Encl.

25 November 2014

Consistent with the capital plan announced on 19 August 2014 QBE Insurance Group Limited (QBE)
successfully priced last night US$700 million 30 year non call 10 Tier 2 subordinated debt securities.
The securities will qualify as Tier 2 Capital under the Australian Prudential Regulation Authority's
(APRA) capital adequacy framework and will include the following terms:

 a term of 30 years (maturing 2 December 2044);

 securities will bear 6.75% per annum interest, payable semi annually in arrears;

 interest will be reset on 2 December 2024 and 2 December 2034 to a rate calculated by reference to the then mid market swap rate plus a margin of 4.3% per annum;

 QBE has an option to defer payment of interest in certain circumstances (which will not constitute an event of default);

 QBE has an option to redeem the securities at face value on the tenth and twentieth anniversaries of the date of issue of the securities and for certain tax and regulatory events (in

each case subject to APRA's prior written approval);

 if APRA determines QBE to be non-viable, all the securities (or in certain circumstances some of them) will convert into QBE ordinary shares;

 the number of QBE ordinary shares issued on conversion will be based on a volume-weighted average price (VWAP) over a certain period around the time APRA determines QBE to be non-

viable, less a discount of 1%. The number of QBE ordinary shares issued on conversion will be capped at a maximum of 20% of the VWAP of the QBE ordinary shares at the issue date;
No shareholder approval is needed for the issue.
The net proceeds from the issue of the securities will be used primarily to fund the retirement of senior debt and otherwise for general corporate purposes.
Mr Pat Regan, QBE CFO said: "The successful pricing of the US$700 million Tier 2 subordinated debt is the completion of another important element of QBE's capital plan."
Settlement and the issue of the securities is scheduled for 2 December 2014. For further information, please contact:

Investor Relations

Group Head of Investor Relations
Tony Jackson
Tel: +61 2 9375 4364 investor.relations@qbe.com

Media Enquiries

David Symons
Tel: +61 (2) 9212 4666
Cell: +61 (0) 410 559 184
Email: david@catocounsel.com.au

QBE Insurance Group Limited

ABN 28 008 485 014
82 Pitt Street
SYDNEY NSW 2000
Australia
www.qbe.com

QBE Insurance Group Limited is listed on the Australian Securities Exchange, is recognised as one of the top 20 global insurance and reinsurance companies as measured by net earned premium and has operations in 46 countries.

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DISCLAIMER

This market release does not constitute an offer to sell or a solicitation of an offer to buy, any securities in the United States. The securities referenced herein have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act") or the securities laws of any state or other jurisdiction of the United States absent registration except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and any other applicable U.S. state securities laws.

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