Ageas gets approval to exchange Fortis 6.5% redeemable securities

By Jennifer Chiou

New York, Aug. 19 - Ageas NV announced that it obtained authorization from the National Bank of Belgium to move forward with the exchange of Fortis Bank SA/NV's 6.5% redeemable perpetual cumulative coupon debt securities issued on Sept. 10, 2001.

The company's request followed Fortis' decision to forgo exercising its call option on the securities in May.

According to a company news release, Ageas was informed that holders representing 95% of the securities decided to opt for the par exchange in cash.

Due to the high participation, Ageas said it has decided to record the acquired securities under loans and receivables at their fair value on the exchange date and not as financial instruments available for sale.

Ageas, an insurance company, added that it included a net charge of €40 million in the second quarter representing the difference between the par value and fair value of the Fortis securities at June 20.

As a holder of the securities, Ageas said that it will be entitled to a quarterly coupon payment of Euribor plus 237 bps on the total amount of the acquired securities, while the net interest income on the cash amount invested is expected to rise by about €24 million.

Fortis is a BNP Paribas affiliate partially held by the Belgian State.

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