New York, July 1 - Swiss Reinsurance Co. priced €640 million of three-year mandatory convertible securities to yield 6.125% with a 20% initial conversion premium.
The exercise price for the convertibles is CHF80.41, and Swiss Re will participate in any future appreciation of up to 20% of the exercise price. Swiss Re stock closed at CHF80.35 Thursday.
The coupon is 6.125%, at the low end of talk which put the coupon at 6.125% to 6.625%.
The Zurich, Switzerland, reinsurer described the deal as "heavily oversubscribed."
BNP Paribas and Merrill Lynch were joint lead managers for the offering.
Swiss Re said the offering will refinance maturing debt and increase its financial strength.
"With this successful €640 million transaction, Swiss Re continues to improve its financial strength by moving from senior debt to hybrid capital," said Ann Godbehere, chief financial officer of Swiss Re, in a news release.
No new shares will be issued through the offering. Underlying shares previously committed to Swiss Re's convertible bond issued in 2001 have been reallocated to the new deal. The reallocation was made possible by the purchase of call options which offset the exposure to deliver Swiss Re shares under the 2001 convertible bond.
The bonds were issued through a non-Swiss subsidiary and will be guaranteed by Swiss Re.
The deal was not offered in the United States, Italy, Australia, Canada or Japan.
| Issuer: | Swiss Reinsurance Co.
|
| Issue: | Mandatory convertible securities
|
| Amount: | €640 million
|
| Maturity: | July 23, 2007
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| Coupon: | 6.125%
|
| Price: | Par
|
| Yield: | 6.125%
|
| Conversion premium: | 20%
|
| Conversion price: | CHF80.41, 20% above CHF80.41
|
| Rating: | Standard & Poor's: AA
|
| Lead managers: | BNP Paribas, Merrill Lynch
|
| Pricing date: | July 1
|
| Settlement date: | July 23
|
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