Aegon meeting on consent bid lacks quorum; solicitation terminated

By Wendy Van Sickle

Columbus, Ohio, April 21 – Aegon NV announced that a meeting on April 21 for holders of its outstanding $500 million perpetual capital securities (ISIN: NL0000116168) to vote on swapping the coupon rate to 10-year SOFR from 10-year Libor plus a spread adjustment as of March 31 did not achieve a quorum, according to a company release.

No resolutions were passed at the meeting, and the company has decided to terminate the consent solicitation immediately, according to Friday’s update.

The company previously indicated it was considering exercising the call option available on the securities but has concluded this is not in its economic interest, the company reported, adding that it is considering appropriate next steps to avoid a situation where no coupon rate can be established and no coupon can be paid.

It is expected that the Libor-referencing swap rate will cease to be published after June 30.

As reported on April 4, based on the 10-year SOFR referencing swap rate of 324.2 basis points on March 31, the proposed spread adjustment was 28.753 bps for a swap rate of 3.01%.

Had the eligible holders consented to the proposed modifications, the securities’ quarterly floating-rate coupon would have been set 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 would have been added to prepare for 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 final deadline for consent instructions and voting forms to be received was 4 a.m. ET on April 19.

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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