Hannover, 8 September 2014:
Hannover Re has today successfully placed a new EUR 500 million subordinated bond on the capital market. The issue was placed predominantly with institutional investors in Europe.
"The new bond enables Hannover Re to take advantage of the low level of interest rates and to optimise the maturity profile of the outstanding hybrid capital", Chief Executive Officer Ulrich Wallin explained.
The issue has a perpetual maturity with a first scheduled call option for Hannover Re after approximately ten years. It carries a fixed coupon of 3.375% p.a. until this date, after which it can be called at each coupon date and the interest rate basis changes to 3-month EURIBOR + 325 basis points. The banks mandated to handle this transaction were Commerzbank – as the structuring advisor – as well as Barclays Bank, Citigroup and Crédit Agricole.
Hannover Re traditionally uses hybrid bonds to optimise its cost of capital. Following this successful new issue the company has four hybrid bonds outstanding on the capital market.