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Phoenix Group to repay £450 million Impala debt, extend loans to 2019
By Susanna Moon
Chicago, Jan. 30 - Phoenix Group Holdings said it plans to pay down £450 million of Impala debt and extend the bank facilities to June 30, 2019.
The paydown will reduce the company's total debt to £1,857,000,000 from £2,369,000,000 as of June 30, 2012, including mandatory amortization of £62.5 million in the second half of 2012, according to a company press release.
The coupon on the company's revised Impala debt facility will be Libor plus 475 basis points, with a 225 bps bump from Jan. 1, 2018.
The group said it is adopting a new gearing calculation, more closely aligned with general market practice. On this new basis, gearing has reduced to 50% from 56%, adjusted as of June 30, 2012.
After the restructuring of the Impala bank debt, the company's board believes that the group will have enough financial flexibility to tap the debt capital markets before the loans expire, the release noted.
There was no change to the Pearl debt facility, the release added.
The company also plans to raise £250 million of equity.
"I am delighted to announce today the re-terming of Phoenix's debt through the injection of fresh equity, and a significant increase in the dividend per share, which we believe will provide policyholders with enhanced security and deliver excellent value to shareholders," Clive Bannister, the group's chief executive, said in the release.
"The new equity will enable us to repay a significant proportion of our Impala debt and re-term the remainder. This significantly strengthens our balance sheet, reduces refinancing risk and allows us to increase dividend payments substantially. We are now well-positioned to embark on the next stage of our journey to deliver long-term growth and shareholder value as the UK's largest specialist closed life consolidator."
The company, previously named the Pearl Group, is a Saint Helier, Jersey-based company that acquires and manages closed life insurance businesses that are in run-off.
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