Statement on 6% €500m 2043 NC 2023 Subordinated Notes
In April 2013, Achmea B.V. ("Achmea") issued €500m Subordinated Fixed-to-Floating Rate Notes, callable in April 2023, with scheduled maturity in April 2043 (ISIN: XS0911388675) (the "Notes"). The Notes were intended to qualify as fully compliant Tier 2 capital under Solvency II once implemented.
Following recent publications by EIOPA, in relation to Own Funds, Achmea believes there is an increased likelihood that the Notes may not qualify as outright Tier 2 under Solvency II when adopted and may, instead, be subject to transitional provisions which are currently envisaged to provide 100% eligibility as Tier 2 capital for up to 10 years from the start of the Solvency II regime as of 1 January 2016.
Under the terms of the Notes, such regulatory treatment would constitute a Capital Disqualification Event and provide Achmea with an option to redeem the Notes at par (plus any interest accrued to the date of redemption), subject to regulatory approval.
In the event that the Notes become subject to transitional provisions and a Capital Disqualification Event occurs but the Notes still maintain 100% recognition as Tier 2 capital, Achmea hereby irrevocably waives its right to exercise this option to call the Notes vis-à-vis all relevant current and future noteholders ahead of its first scheduled optional redemption date in April 2023 for as long as the Notes maintain 100% recognition as Tier 2 capital. In other cases the option will remain in full force and effect and is not waived.
Achmea believes the above clarifications should remove any uncertainty around the Notes and further wishes to maintain open lines of communication with debt investors on this point.