Hong Kong’s FWD skips call for 5½% perpetual capital securities

By Mary-Katherine Stinson

Lexington, Ky., Dec. 30 – FWD Ltd. has elected not to redeem its outstanding $200 million 5½% subordinated perpetual capital securities (ISIN: XS1748857379) on its first call date, according to a notice.

The first call date is Feb. 1; however, the company has elected instead to leave the securities outstanding due to corporate developments.

Related company FWD Group Ltd. made a similar decision on May 16, 2022 not to call its $750 million zero-coupon subordinated perpetual capital securities (ISIN: XS1628340538).

The corporate developments taken into account include the initial public offering of FWD Group Holdings Ltd. (FGHL) on the Hong Kong Exchange on Feb. 28, 2022, which was renewed Sept. 13, and subsequent reorganization steps to make FGHL the new market access point for all future equity and debt activities of the group.

FWD also cited the consent solicitation exercise launched on June 17, 2021 as a factor in the decision, noting that progress has been made in satisfying the settlement conditions in respect of FWD’s indebtedness to FGHL. If the proposals are fully implemented, FGHL will be substituted as the issuer for the 5½% perpetuals.

The outstanding securities will now pay a semiannual distribution at a rate equal to Treasuries plus 307.5 basis points.

The securities will continue to be redeemable at the issuer’s option on each subsequent distribution date, the next of which is Aug. 1, 2023.

Hong Kong-based FWD is the insurance business of investment group Pacific Century Group.

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