Regulated information - Ageas and Fortis Bank agree on RPN/RPN(I) and call Tier 1 instrument subject to the acceptance rate on the CASHES tender offer
(Thomson Reuters ONE) -
Ageas and Fortis Bank reached an agreement on a partial settlement of the
RPN/RPN(I)[1] and full call of Tier 1[2] instrument (ISIN BE0117584202) issued
by Fortis Bank and for 95% held by Ageas. The settlement and call are both
subject to BNP Paribas reaching at least a 50% success rate on a cash tender of
CASHES[3], launched today.
The RPN/RPN(I) fully relates to the CASHES. Fortis Bank serves the coupon on
this security and therefore reports the securities as an on-balance liability;
ageas SA/NV and ageas N.V. are co-obligors, and as such, report their commitment
only as a contingent liability.
The parties agreed that BNP Paribas will launch a cash tender on the CASHES via
a reverse book building process. At a second stage, BNP Paribas will convert the
acquired CASHES into its underlying Ageas shares, with a commitment not to sell
them for a period of 6 months, and collect an indemnification from Ageas. The
RPN/RPN(I) mechanism will cease to exist in proportion to the CASHES converted.
The redemption of the Tier 1 securities and the indemnification payment will be
netted.
Rationale for Ageas
* Reduced credit exposure
Ageas has a substantial credit exposure to Fortis Bank, due to the hybrid
instruments issued before the break-up of Fortis in 2008[4]. Assuming that BNP
Paribas is successful in reaching the minimum threshold level, the reduction in
this exposure will range between EUR 2.5 and EUR 4.0 billion, depending upon the
acceptance rate (EUR 1 billion of Tier 1 instrument and EUR 1.5 to 3.0 billion
on the CASHES).
* Decreased volatility in the results
Via the RPN/RPN(I) mechanism, the accounting volatility due to movements in the
value of CASHES and its underlying Ageas shares were so far transferred to
Ageas. This has resulted in substantial complexity and volatility in the Ageas
results in the past years. Assuming that BNP Paribas is successful in reaching
the minimum threshold level, this transaction will substantially reduce the
volatility in function of the acceptance rate.
* Improved liquidity
The liquidity profile of Ageas will improve as a result of the full redemption
of the Tier 1 instrument Ageas holds, notwithstanding the indemnity payment that
Ageas will make.
Financial Impact
The final results of the tender and the exact indemnification will be published
after the conversion of the CASHES.
Indemnity
Ageas's indemnification to BNP Paribas will be determined based on a number of
parameters:
* the number of CASHES converted
* the offer price of the cash tender of CASHES
* the underlying Ageas share price at conversion.
BNP Paribas has indicated that the Offer price will range between 45% and
47.5%. Based on the above factors, the indemnifications will range from EUR 200
million to EUR 475 million according to the success rate, respectively 50 and
100%. If less than 100% of the CASHES is tendered, Ageas will pay Fortis Bank an
annual indemnification.
Shares outstanding
If the tender offer is successful and subject to the exchange ratio of CASHES,
the number of shares entitled to dividend and voting rights will increase with a
range from 62.6 to 125.3 million shares, representing respectively 2.5% to 5% of
the shares outstanding per year end 2011.
Result
The transactions will influence the result in various ways:
* Positive impact due to redemption Tier 1 instrument
Ageas holds the Tier 1 securities at an amortized cost value in its books. This
value amounts to EUR 794 million at year end 2011, while it will receive EUR
953 million. This will positively affect the first quarter 2012 result before
tax with EUR 159 million.
* Positive impact due to pro rata release of RPN(I) liability
Ageas expects to value its RPN(I) liability at EUR 190 million at year end
2011. Due to the exchange, the RPN/RPN(I) partially ceases to exist. Ageas will
record a result on the partial cancellation of the RPN(I).
* Negative effect due to indemnifications
The indemnifications will range from EUR 200 million to EUR 475 million
according to the success rate, respectively 50 and 100%.
.
Solvency/Equity
The results stated above will influence the equity of the General Account and
Group solvency.
However, the solvency of the operating insurance companies will not be
affected.
Net Cash position
If the tender offer is successful, Ageas will receive EUR 953 million for the
Tier 1 instrument, but will at the same time pay the pro rata share of the above
stated indemnity. Net proceeds, to be received on 26 March 2012, will range from
EUR 475 million to EUR 750 million.
Time schedule
The tender offer will close on Monday 30 January 2012, end of the business day
in London.
Ageas is an international insurance company with a heritage spanning more than
180 years. Ranked among the top 20 insurance companies in Europe, Ageas has
chosen to concentrate its business activities in Europe and Asia, which together
make up the largest share of the global insurance market. These are grouped
around four segments: Belgium, United Kingdom, Continental Europe and Asia and
served through a combination of wholly owned subsidiaries and partnerships with
strong financial institutions and key distributors around the world. Ageas
operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal,
Turkey, China, Malaysia, India and Thailand and has subsidiaries in France,
Germany, Hong Kong and UK. It is the market leader in Belgium for individual
life and employee benefits, as well as a leading non-life player, through AG
Insurance, and in the UK, it has a strong presence as the third largest player
in private car insurance and the over 50's market. It employs more than 13,000
people and has annual inflows of almost EUR 18 billion.
MEDIA CONTACT
+32 (0)2 557 57 37
INVESTOR RELATIONS
Brussels
+32 (0)2 557 57 33
Utrecht
+31 (0)30 252 53 05
Ageas
Rue du Marquis 1 - 1000 Brussels - Belgium
Archimedeslaan 6 - 3584 BA Utrecht - The Netherlands
www.ageas.com
--------------------------------------------------------------------------------
[1] The RPN(I) is a financial instrument held by ageas SA/NV and ageas N.V. that
results in quarterly payments being made to, or received from, Fortis Bank
SA/NV. Each quarterly interest payment (3 month EURIBOR + 20 bps) is paid over a
reference amount of a Relative Performance Note (RPN). This RPN was designed to
avoid accounting volatility at Fortis Bank SA/NV with regard to the market value
changes of the CASHES and its underlying 125,313,283 Ageas shares.
[2] EUR 1,000 million of Redeemable Perpetual Cumulative Coupon Debt Securities
(ISIN BE0117584202) issued by Fortis Bank SA/NV in 2001, for EUR 952.9 million
owned by ageas N.V. since 26 September 2011 as result of an exchange for cash
with previous holders after Fortis Bank decided not to call these bonds at their
first call date, this exchange being in line with a Support Agreement entered
into by the former Fortis' parent companies, now ageas SA/NV and ageas N.V.
[3] CASHES, EUR 3 billion Convertible And Subordinated Hybrid Equity-linked
Securities (ISIN BE0933899800) floating rate (3 month EURIBOR + 200 bps)
securities of Fortis Bank SA/NV, with the former Fortis' parent companies, now
Ageas N.V. and Ageas SA/NV, as "Co-obligors", issued in 2007, convertible in
125,313,283 Ageas shares
[4] Ageas has on lent, via Ageas Hybrid Financing, approximately EUR 0.9 billion
in Tier 1 instrument to Fortis Bank, it owns approximately EUR 1 billion of the
above mentioned Tier 1 instrument, is co-obligor on the EUR 3 billion CASHES and
has granted a support agreement on the EUR 1 billion Redeemable Perpetual
Cumulative Coupon Debt securities issued by Fortis Bank in 2004 (ISIN BE
0119806116 respectively BE0119807122).
Pdf version of the press release:
http://hugin.info/134212/R/1580235/493363.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ageas via Thomson Reuters ONE
[HUG#1580235]
Unternehmensinformation / Kurzprofil:
Datum: 26.01.2012 - 08:16 Uhr
Sprache: Deutsch
News-ID 107976
Anzahl Zeichen: 9570
contact information:
Town:
Brussel
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 199 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Regulated information - Ageas and Fortis Bank agree on RPN/RPN(I) and call Tier 1 instrument subject to the acceptance rate on the CASHES tender offer"
steht unter der journalistisch-redaktionellen Verantwortung von
Ageas (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
