COFACE SA implements contingent equity line of up to €100M

           
           
Paris, 9 February 2016

COFACE SA implements contingent equity line of up to €100M

COFACE SA (« COFACE ») implements today a 3-year contingent equity line (with a termination option after 2 years at the sole discretion of Coface) of €100 million with BNP Paribas Arbitrage, available in one tranche and exercisable upon occurrence of extreme events described below.

This contingent equity line is an efficient and cost-competitive solution (annual commission of 0.50%) to complete existing capital and solvency management tools. It contributes to prudent capital management in the framework of Solvency II's pillar 2 and protects the group from extreme risks by enhancing its financial strength.

For such purpose, COFACE and BNP Paribas Arbitrage have entered into a warrant issuance agreement (bons d'émission d'actions), pursuant to which COFACE will issue on 10 February 2016, 15,724,823 warrants to BNP Paribas Arbitrage.

The warrants issuance was decided by the CEO of COFACE on 9 February 2016, pursuant to the delegation granted by the company's Board of Directors on 15 December 2015 and on 9 February 2016, within the framework of the 12^th and 13^th resolutions of the General Meeting of Shareholders of COFACE held on 2 June 2014.

The maximum amount of the consecutive capital increase is €100 million (issuance premium included), an amount for which COFACE has received a firm commitment from BNP Paribas Arbitrage to subscribe for shares, in view of their private placement in accordance with the provisions of article 411-2 II of the French monetary and financial code.

The share issuance will be triggered automatically upon the occurrence of certain extreme events described below during the 3-year risk coverage period beginning on 1 January 2016 and ending 31 December 2018 (inclusive). The warrants will remain exercisable until 30 June 2019 at the latest.  

In the absence of the occurrence of extreme trigger events, the estimated probability of occurrence of which is very low, no share will be issued under this programme, which would then reach its terms without having any dilutive effect on shareholders.

Characteristics of the contingent equity line

The operation will consist in the issuance by COFACE of 15,724,823 warrants (bons d'émission d'actions) to BNP Paribas Arbitrage. Each warrant will oblige BNP Paribas Arbitrage to subscribe to a new COFACE share in view of its private placement according to the terms of article 411-2 II of the French monetary and financial code.