A disaster-proof construction for IAG
The well-earned reputation for Australian investment-banking innovation earned another star in November, when Insurance Australia Group raised A$500 million (US$374.7 million) through an innovative hybrid securities issue. The notes can instantaneously become Tier 1 capital securities if IAG breaks the glass' in the event of an emergency. Mark B. Johnson reports.
Insurance Australia Group sold A$500 million of perpetual reset
exchangeable securities (RES) that it can exchange into perpetual
preference shares that will count as Tier 1 regulatory capital.
UBS, KPMG and Mallesons ARRANGER
UBS Investment Bank
QUESTION: WHEN IS a security not a security? Answer: When
insecurity prevails. Insurance Australia Group (IAG)
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