Swiss Re has announced a six-year senior exchangeable notes offering worth US$500 million.
The offering, revealed today, is being primarily made to replace the CHF320 million aggregate principal amount of perpetual subordinated notes with issuer stock settlement that were issued in 2012 and redeemed in 2017. Swiss Re said the six-year senior exchangeable notes may be stock settled at its option or may be exchanged at the option of noteholders for fully paid, registered Swiss Re shares, unless the reinsurance giant elects to settle the exchange of notes in cash.
“To economically offset such settlement of a noteholder initiated exchange (in cash or in Swiss Re shares), Swiss Re will purchase matching call options on Swiss Re shares with a portion of the proceeds of the offering,” said Swiss Re in its announcement. “Consequently, no new Swiss Re shares will be issued upon a noteholder-initiated exchange.”
It added that the notes are senior and unsecured obligations of Swiss Re and are expected to carry a fixed coupon of between 2.75 and 3.25% per annum, payable semi-annually in arrear. The Swiss Re notes will be redeemed on or around June 13, 2024 at their principal amount, along with any accrued but unpaid interest up to but excluding that date.
“In limited circumstances, the Swiss Re notes may be redeemed early, in cash,” said the reinsurer. “Holders of the Swiss Re notes have a put option in the event of a change of control, delisting event, or a nationalisation event.”
The reference share price, the initial exchange price, and the initial share price floor will be announced on June 20, 2018. Meanwhile ELM B.V. has been named as the repackaging vehicle.
