DEAL: Phoenix Group’s tier 2 euro-denominated bullet bond

Author: Olly Jackson | Published: 26 Sep 2018

Phoenix Group has issued its first ever euro-denominated bond, a €500 million ($587 million approximately) tier 2 capital bond in a rarely used bullet structure.

The deal is the latest in the increasingly active insurance sector and part of an increasing trend of companies refinancing ahead of Brexit. The bullet structure, under which the entire principal value is repaid at maturity, will help reduce uncertainty ahead of Brexit.

"As a tier 2 instrument, this issuance will provide the group with solvency as opposed to a senior instrument," said Alison Stevens, deputy group treasurer at Phoenix. "We chose the maturity date for that time because it fitted in well with the maturity profile of our existing debt, as we don’t have any other debt instruments maturing in that year."

The rationale behind issuing in euros is that it could increase Phoenix’s investor base in Europe, underlining the high level of activity in...