AXA today announced the successful placement of Euro 1.5 billion of Reg S perpetual deeply subordinated notes (the “Notes”) with institutional investors. The Notes qualify as Restricted Tier 1 capital under Solvency II. Investor demand for the issuance was strong with a book subscribed more than 5 times.
The initial fixed rate has been set at 6.375% per annum until the end of a 6-month call window period (ending on January 16, 2034), when the interest rate will reset and every five years thereafter at the prevailing Euro 5-year Mid Swap rate plus a margin of 384.1 basis points. In line with the Solvency II requirements, the Notes feature a loss absorption mechanism in the form of a write-down* of the nominal amount of the Notes in the event that one of the solvency-related triggers** is breached***. Interest payments are at the full discretion of AXA unless they are mandatorily prohibited.
The Notes are expected to be rated BBB+ by Standard & Poor’s and Baa1(hyb) by Moody’s. They will be treated as capital from a regulatory and rating agencies’ perspective within applicable limits.
This issuance is part of AXA Group’s funding plan for 2024 and the proceeds will be used for general corporate purposes, including the refinancing of part of the AXA Group’s outstanding debt.
The settlement of the Notes is expected to take place on January 16, 2024.