Continuing to break new ground, King & Wood Mallesons has advised Insurance Australia Group (IAG) on the launch of its new Convertible Preference Shares (CPS) hybrid and Reset Preference Shares (RPS) reinvestment offer.
The offer represents the first issue by an insurance company of an instrument that will fully qualify as Tier 1 regulatory capital under the APRA’s current prudential standards.
The new CPS hybrid is being offered to raise approximately $350m, with the ability to raise more or less. Under the reinvestment offer, existing holders of IAG’s RPS hybrid, which are due to be bought-back in June 2012, can reinvest their RPS into the new CPS.
The new hybrid offering forms part of IAG’s ongoing capital management strategy, with the proceeds of the sale to be used for general corporate purposes, including the refinancing of Reset Preference Shares.
King & Wood Mallesons acted as issuers counsel and structuring counsel for IAG.
The King & Wood Mallesons team was led by M&A partner Shannon Finch and banking partner Ian Paterson, who were supported by senior associates Piny Ly, Henrik Moritz and Sarah Turner, and solicitors Nilofar Ali, Emily Zhang, Claire Horan, Alexandra Whelan and Sarah Silk. M&A partner David Friedlander and taxation partner David Wood also advised on the deal.
Shannon said: “we are very excited to have acted for IAG on this significant deal, which is the first issue by an insurance company to qualify for inclusion as Tier 1 regulatory capital under Basel III.”
UBS and Macquarie acted as Joint Lead Managers and arrangers. NAB and Westpac also acted as Joint Lead Managers. Freehills advised the Joint Lead Managers on the offer management agreement.
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