Danske Markets has arranged an issue of subordinated notes for Topdanmark A/S, initially for a total value of DKK 250m. Because of strong investor demand the issue was increased by DKK 100m, resulting in an issue totalling DKK 350m.
Optimising capital value
Topdanmark issued in 2005 subordinated notes for 250mio. These notes have a final maturity in 2013. However, Topdanmark had the option to to prepay this issue on 27 June this year. Doing this in conjunction with the issuance of new subordinated notes would optimise the capital value for Topdanmark
Re-opening the market
“The new issue market for subordinated notes in Danish Kroner has been non-existing for the past years due to the financial crisis. However, this transaction from Topdanmark proves investor interest still exists, and with its strong brand and financial strength, Topdanmark was the right issuer to re-open the market”, says Per Høg Jensen, Vice President DCM, Danske Markets.
“The transaction is the result of a very focused process, from the initial dialogue with the issuer together with the Institutional Client Coverage team to a thorough deal processing and effective teamwork in DCM and across various sales sections in Danske Markets. The marketing was supported by an in-depth issuer credit profile from Danske Credit Research, and this led to quick investor acceptance of the subordinated status of the notes amid the yield pick-up available”, says Bo Wetterstein, Global Head of DCM, Danske Markets.
The rate of interest for the first five years is 7.15% and equated to DKK 5 year swap + 475bps when the deal priced. This spread is considerably lower than comparable issues in the Euro market demonstrating the current strong Danish investor interest for high yield products.
Which types investors?
The notes issued have been allotted to a group of institutional and professional investors, the majority of whom are corporate funds and fund managers, coupled with some high net worth individuals.
About Topdanmark Forsikring A/S
Topdanmark Forsikring A/S(Topdanmark) is the second largest Danish property and casualty insurer, with a market share of 18%. Topdanmark is “best in class” on its combined ratio and low cost base, compared to its Nordic peers.