Ageas fully prepared to meet its obligations following decision of BNP Paribas affiliate Fortis Bank SA/NV not to call its Debt Securities 2001
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Regulated information - Ageas fully prepared to meet its obligations following
decision of BNP Paribas affiliate Fortis Bank SA/NV not to call its Debt
Securities 2001 - Ageas decides to qualify the RPN(I) liability as permanent
funding
Fortis Bank SA/NV, a BNP Paribas affiliate partially held by the Belgian State,
has decided not to exercise its call option on the 6.5% Redeemable Perpetual
Cumulative Coupon Debt Securities 2001 issued by Fortis Bank SA/NV (the
"Securities")[1].
Following Fortis Bank SA/NV´s decision, Ageas confirms that, pursuant to the
terms and conditions of the Securities, it will seek approval from the National
Bank of Belgium ("NBB") to acquire the Securities against cash and at par (the
"Exchange") on the first call date i.e. 26 September 2011 (the "Exchange
Date")[2]. After the Exchange Date, the Securities will be callable by Fortis
Bank SA/NV on a quarterly basis.
Ageas will communicate to the market as soon as possible the decision of NBB.
Holders of Securities wishing to opt for the Exchange are invited to contact the
Trustee for further details on the exercise of the Exchange.
In the event approval is not granted, the Securities will remain outstanding
with a floating coupon.
If NBB approves the Exchange, Ageas will hold, as from the Exchange Date, the
acquired Securities as financial instruments "available for sale" at fair value.
This will affect the net result and shareholders´ equity of the General Account
at the Exchange Date for the difference between the nominal value and the fair
value of the Securities at such date. Subsequent fair value adjustments will be
reflected in the shareholders´ equity. However, as a result of the Exchange,
Ageas will be entitled to a quarterly coupon payment of 3-months Euribor + 237
bps on the total amount of the acquired Securities. Assuming 100% of the
Securities are acquired by Ageas at the Exchange Date, the yearly net interest
income on the cash amount invested is expected to rise by approximately EUR 24
million.
The net cash position of Ageas´s General Account, which amounted to EUR 2.1
billion at 31 March 2011, will be reduced by a maximum of EUR 1 billion
depending on the amount of the Securities acquired. The remaining net cash
position will stay at a comfortable level.
Ageas emphasizes that the Exchange will not affect the solvency position of its
insurance operations for which it reported a ratio of 201% under IFRS at 31
March 2011.
Ageas´s discretionary capital amounted to EUR 0.2 billion at 31 March 2011. This
amount is based on the assumption that EUR 1 billion was set aside should the
Exchange occur. After the Exchange, the discretionary capital will be positively
adjusted with the amount of cash set aside but not disbursed in the Exchange.
Furthermore, following the re-assessment of the nature of the RPN(I)
liability[3], Ageas has decided to qualify the RPN(I)( )as permanent funding. As
a consequence the discretionary capital will increase by EUR 0.7 billion, in
line with the fair value of the RPN(I) at 31 March 2011.
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,
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 second 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.
Press 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
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[1] On 10 September 2001, Fortis Bank SA/NV issued EUR 1,000 million of
Redeemable Perpetual Cumulative Coupon Debt Securities, benefiting from a
Support Agreement entered into by the former Fortis´ parent companies, now ageas
SA/NV and ageas N.V. This Support Agreement grants Securities´ holders the
option, should Fortis Bank SA/NV not call the instrument, to request ageas SA/NV
and ageas N.V. to exchange the Securities against newly issued Ageas´s shares.
On 27 and 28 April 2011, the shareholders´ meetings of Ageas did not approve
sufficient authorised capital for the exchange. Therefore, ageas SA/NV and ageas
N.V. will need to settle the exchange for cash, subject to regulatory approval,
as provided by the Securities´ issuance terms and conditions.
(([2]))( )See press release of BNP Paribas Fortis at www.bnpparibasfortis.com
[3] RPN(I) is a financial instrument related to the CASHES, a hybrid debt
instrument issued by Fortis Bank SA/NV with ageas SA/NV and ageas NV as co-
obligor. The RPN(I) results in quarterly payments being made to, or received
from, Fortis Bank SA/NV. The quarterly interest payments are determined as the
average of the interest payments to be made on a reference amount, the so called
RPN. This RPN is based on the evolution of the market prices of the CASHES
securities and the Ageas´s share price compared to the original valuation of
both instruments.
Pdf version of the press release:
http://hugin.info/134212/R/1519341/455833.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#1519341]
BE0003801181
