QBE today announced that it had successfully priced USD$300m of 30 year Tier 2 subordinated debt securities. There is no call period for the first 10 years with the securities able to be redeemed on the 10th and 20th anniversaries of the issue (subject to tax and regulatory approvals). The net proceeds from the issue of the securities will be used primarily for general corporate purposes.
The securities will pay a twice yearly coupon/interest totalling 6.10% per annum. This rate will be reset on 12 Nov 2025 and again on 12 Nov 2035 at the then mid-market swap rate plus a margin of 3.993%.
As an insurance company, QBE is regulated by APRA and so the securities will also have a non-viability trigger and will convert into ordinary shares should APRA deem the company non-viable.
There is also an option for QBE to defer payment of interest in circumstances (that would not constitute a default).
Mr Pat Regan, QBE CFO said “This benchmark issuance further builds on the success of our recent AU$200 million trade and we are extremely pleased with the level of pricing achieved, particularly in the context of recent market volatility.”
YieldReport readers will recall that we flagged an investor roadshow in early September resulting in an issue of 5 year hybrid notes.