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Swiss Life Holding reducing minority interests in Swiss Life/Rentenanstalt

03.12.2003

Issuance of mandatory convertible securities to a maximum amount of CHF 350 million

Swiss Life Holding intends to reduce the minority shareholdings in its Swiss Life/Rentenanstalt subsidiary by buying up Swiss Life/Rentenanstalt shares (RAN), thus simplifying the shareholder structure. To realise this in the most efficient manner possible, the enterprise is bringing out a mandatory convertible securities (MCS) issue, which should raise up to CHF 350 million in funds. At the Investors' Day event being held today for the first time, Swiss Life will describe its approach to asset and liability management, risk management and investment management.

Swiss Life Holding means to simplify its shareholder structure. It intends to reduce the minority stake still held in its Swiss Life/Rentenanstalt subsidiary following the exchange of Swiss Life/Rentenanstalt shares (RAN) for shares in Swiss Life Holding (SLHN) which took place in 2002. The opportunity presents itself because the Fondiaria-SAI Group has offered to sell its 603 414 RAN shares (a 5.1% stake) to Swiss Life Holding. The purchase consideration amounts to CHF 212 million, equivalent to a price of CHF 351 per RAN share. In addition, OZ Bankers AG has served as intermediary for a further 237 706 RAN shares (a 2.0% stake). In this case the purchase price amounts to 1.55 times the share price of the SLHN share on the day of the bookbuilding for the mandatory convertible securities (17 or 18 December 2003). These transactions will give Swiss Life Holding ownership of 99.8% of the RAN shares. Swiss Life Holding will present an offer of equivalent value to the remaining minority shareholders.

These transactions are being financed by a mandatory convertible securities issue to the maximum amount of CHF 350 million. The mandatory convertible securities must be converted by 30 December 2004 into Swiss Life Holding shares drawn from the available conditional capital. The proceeds from the issue will count towards equity. Swiss Life Holding anticipates that the issuance of the mandatory convertible securities will reinforce the Group's equity on a consolidated basis and will have a neutral impact on earnings per share. In the words of Rolf Dörig, Chief Executive Officer: "Reducing the minority stake in Rentenanstalt will not only allow us to simplify our ownership structure, it will also give us greater flexibility when it comes to exploiting the advantages of our holding structure. The short-term convertible securities represent the most favourable means of executing the transactions, for both enterprise and shareholders alike."

Details on the MCS
Swiss Life Cayman Finance Ltd. will be issuing mandatory convertible securities (MCS II) to the maximum amount of CHF 350 million, which are unconditionally and irrevocably guaranteed by Swiss Life Holding. In Switzerland and countries whose laws so permit, the mandatory convertible securities will initially be offered for advance subscription to entitled Swiss Life Holding shareholders by way of non-tradeable advance subscription rights (subscription period: 9 to 16 December 2003, 12.00 CET). Swiss Life Holding shareholders registered prior to the commencement of exchange trading on 9 December 2003 are entitled to subscribe for one MCS II with a nominal value of CHF 1000 for each 61 shares held. Any portion of the MCS issue not taken up by shareholders will be offered in an open bookbuilding procedure to institutional investors in Switzerland and other countries whose laws so permit. The bookbuilding procedure will be carried out on 17 or 18 December 2003. The definitive terms and conditions (including issue amount, fixed coupon and conversion ratio) will be determined the same day.

The MCS II conversion ratio is equivalent to CHF 1000 divided by the share price of Swiss Life Holding shares on the day of the bookbuilding (conversion price). If not converted earlier, the MCS IIs will automatically be converted into Swiss Life Holding shares on 30 December 2004. From 9 February 2004 until 15 December 2004 each MCS II can be prematurely converted into Swiss Life Holding shares. The issuer will pay a fixed coupon amount of at least 1.00%, payable on 30 December 2004, plus an additional amount equivalent to any dividend for those shares to which the holder is entitled on the basis of the MCS II conversion ratio. The floating coupon component is payable on the date on which any dividend is paid to shareholders. In the event of early conversion by the investor, entitlement to payout of the coupon amount is forfeited.

Payments for allocated MCS IIs will become due on 30 December 2003. Application will be made for an MCS II listing on the main board of the SWX Swiss Exchange.

Credit Suisse First Boston is acting as sole lead manager and bookrunner for the MCS II issue and guarantees the issuer minimum proceeds from the issue of CHF 240 million.

First-ever Investors' Day
At the Investors' Day today Swiss Life will inform financial analysts and institutional investors about the progess made in realising its new strategy and offer an in-depth look at its concepts, methods and processes with reference to asset and liability management, risk management and investment management. In his introduction to the event Rolf Dörig, Chief Executive Officer, explains the state of the restructuring as follows: "We have already shed 1500 positions by the end of October 2003, taking us to where we originally wanted to be by the end of 2004. We are slightly ahead of schedule in terms of cost reductions, too. There was a roughly 4% drop in premium volume as of the end of October in comparison with the same period of the previous year. Growth in all our other core markets is not sufficient to offset the noticeable fall in premium volume in Switzerland as a result of the measures taken to make business profitable. We will close the 2003 financial year with a profit, and we are adhering to our medium-term goals."

Bruno Pfister, Chief Financial Officer, discusses asset and liability management. In this area the main focus is on matching assets and liabilities, so that the balance sheet is immuned against interest rate fluctuations from an economic viewpoint, while also taking into account all other relevant factors such as regulatory requirements, solvency regulations, accounting standards, and the rating agencies' liquidity and capital requirements. Michael Koller, Chief Risk Officer, takes an indepth look at the risk aspects of life insurance (valuation methods, risk measurement and management, pricing models and regulatory requirements). Martin Senn, Chief Investment Officer, explains where Swiss Life stands on the three priority objectives in the area of investments: simplifying the structure, reducing risks and bringing the investment process into line with ALM concepts. In this context he also looks at how the equity exposure, which stood at 2.1% (after hedging) at the end of November, has fared in the current year. All Investors' Day presentations can be downloaded at www.swisslife.com from 07.30 CET.


Swiss Life
The Swiss Life Group is one of Europe's leading providers of life insurance and long-term savings and protection. The Swiss Life Group offers individuals and companies comprehensive advice and a broad range of products via agents, brokers and banks in its domestic market, Switzerland, where it is market leader, and selected European markets. Multinational companies are serviced with tailor-made solutions by a network of partners in over fifty countries.

Swiss Life Holding, registered in Zurich, was founded in 1857 as the Swiss Life Insurance and Pension Company. Shares of Swiss Life Holding are listed on the SWX Swiss Exchange (SLHN). The enterprise employs around 11 000 people worldwide.
Cautionary statement regarding forward-looking information
This publication contains specific forward-looking statements, e.g. statements including terms like “believe”, “assume”, “expect” or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not place undue reliance on forward-looking statements. The company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments.
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