SCOR successfully places $125m deeply subordinated Tier 1 issuance

Global reinsurance company SCOR has successfully placed a perpetual deeply subordinated restricted Tier 1 Regulation S notes issue in the amount of $125 million.

These new notes will be assimilated and form a single series with the existing $625 million perpetual deeply subordinated restricted tier 1 notes issued on March 13, 2018 (the “original notes”). The new notes issue will bear the same terms and conditions as the original notes.

SCOR intends to use the proceeds of the issuance for general corporate purposes. SCOR also confirmed its current intention, subject to market conditions and regulatory approval, to redeem the SFr 125 million undated subordinated note lines, issued on October 20, 2014, and callable in October 2020 using the proceeds of the new notes.

The coupon for this new USD placement is 5.25 percent, until the first call date of March 13, 2029, and resets every five years thereafter at the prevailing five year US Treasury yield plus 2.37 percent per annum (no step-up). The issue price of the new notes is 99.125 percent.

The proceeds from the new notes were swapped into euros providing an effective yield cost to SCOR of 3.115 percent. The new notes will be assimilated with the original notes 40 calendar days after their issue date. Settlement is expected to take place on December 17, 2019.

Application will be made for the new notes to be listed on the official list of the Luxembourg Stock Exchange and admitted to trading on the regulated market of the Luxembourg Stock Exchange.

The proceeds from the new notes are expected to be eligible for inclusion in SCOR’s Tier 1 regulatory capital, in accordance with applicable rules and regulatory standards, and as equity credit in the rating agency capital models.

The new notes are expected to be rated A- by Standard & Poor’s.

Denis Kessler, chairman and chief executive officer of SCOR, said: “The success of today’s USD placement through a tap of our outstanding Tier 1 instrument issued last year demonstrates the group’s ability to pursue an active and innovative capital management policy and secure long-term funding on the best conditions. The notes were oversubscribed by five times which bears witness to the quality and strength of SCOR’s credit worthiness.”

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