UK insurer Friends Provident's new financing proves the
worth of embedded value securitization to the life insurance
The deal, which closed in mid-December, allowed Friends
Provident to raise £380 million ($711 million) of core
regulatory capital at a much lower cost than alternative Tier 1
capital-raising techniques, such as the issuance of new equity
or complex perpetual bonds.
Embedded value deals seek to monetize surplus value
contained in a defined...