Aegon launches consent solicitation to swap SOFR for Libor

By Mary-Katherine Stinson

Lexington, Ky., April 4 – Aegon NV announced a consent solicitation to holders of its outstanding $500 million perpetual capital securities (ISIN: NL0000116168) to swap the coupon rate to 10-year SOFR from 10-year Libor plus a spread adjustment as of March 31, according to a company release.

Based on the 10-year SOFR referencing swap rate of 324.2 basis points on March 31, the proposed spread adjustment is 28.753 bps for a swap rate of 3.01%.

In case the eligible holders consent to the proposed modifications, the securities will have a quarterly floating-rate coupon equal to the 10-year SOFR ICE swap rate plus 38.753 bps, the sum of the original credit spread and the spread adjustment, subject to an 8.5% cap.

In addition, updated fallback provisions will be added to prepare for the any future discontinuation of SOFR.

Currently the securities feature a quarterly floating-rate coupon equal to 10-year Libor plus 10 bps subject to an 8.5% cap. The rate is expected to cease publication after June 30.

Since the securities’ terms do not contain a fallback that can be used to determine the floating rate coupon post-cessation, Aegon has chosen to launch a consent solicitation to amend the floating-rate coupon calculation to avoid a situation where a coupon rate cannot be established or paid.

The final deadline for consent instructions and voting forms to be received is 4 a.m. ET on April 19.

The consent solicitation meeting will be held at 4 a.m. ET on April 21 at the offices of Allen & Overy LLP in Amsterdam. The results will be announced as soon as practicable after the meeting.

If holders do not deliver their consent, the notice stated that the company will consider other options to amend the coupon.

HSBC Continental Europe (+44 20 7992 6237; LM_EMEA@hsbc.com) is acting as the solicitation agent. Kroll Issuer Services Ltd. (+44 207 704 0880; aegon@is.kroll.com; https://deals.is.kroll.com/aegon) is acting as tabulation agent.

The financial services company is based in The Hague.

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