AXA Global Life announces the successful placement of €285 million in bonds to protect the Group against extreme events in Life
April 28, 2015
published at 2:00 AM CEST
Today, AXA Global Life announced the successful placement, by a newly formed Irish special-purpose vehicle (Benu Capital), of €285 million of excess mortality notes to institutional investors. There are two different classes of notes with a scheduled maturity in January 2020: Class A notes, for a total of €135 million, and Class B notes, for a total of €150 million, each class providing protection at different risk levels.
This transaction provides AXA Global Life with two fully collateralized, five-year protections against extreme mortality risk in France, Japan, and the United States.
The notes use an index trigger structure specific to each covered country. Each country index is based on mortality data published by official statistical agencies and weighted by gender and age bands to closely replicate the risk of the AXA Group portfolio.
The spread to be paid by AXA Global Life to Benu Capital for the excess mortality protection within the risk period has been set to 255 basis points per annum for the excess mortality protection provided by the Class A notes, and 335 basis points per annum for the excess mortality protection provided by the Class B notes. The transaction features two innovative mechanisms: first, a protection trigger level structured on a calendar year basis, resulting in both increased sensitivity to short duration events and acceleration of the counterparty payment process. Secondly, it introduces a dropdown mechanism on Class A, which increases the sensitivity of the protection to extreme mortality events for the last year of the transaction and therefore improves its efficiency.
Jean-Christophe Ménioux
CEO of AXA Global Life (2013-2016)
This issuance confirms the Group's ability to manage proactively and dynamically its risks, in a supportive market environment, using both traditional reinsurance and alternative risk transfer instruments such as Insurance Linked Securities. It also demonstrates AXA Group's continuous drive to innovate, not only in terms of technical engineering but also by being the sole insurer to have issued such instruments to protect itself against extreme mortality.
This communication does not constitute an offer to sell or the solicitation of an offer to buy the securities mentioned herein in any jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act.
In the United-Kingdom, this communication is only being distributed to and is only directed at persons (I) who are investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (II) who are high net worth entities, or other persons to whom it may lawfully be communicated, falling within article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons"). Any person who is not a Relevant Person must not act or rely on this communication or any of its contents. Any investment or investment activity relating to the Offering and/or the Securities is available only to Relevant Persons and will be engaged in only with Relevant Persons.
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