Aegon Ltd. · EURONEXT:AGN
Aegon — Debt Investor Presentation (May 2023)
58 slides from Aegon's debt investor presentation, May 2023
Slide 1: SAECURE 21 Investor Presentation
1 SAECURE 21 Investor Presentation May 2023 Helping people Helping people live their achieve bestof a lifetime lives financial security
Slide 2: Disclaimer (I)
Disclaimer (I) This presentation was prepared by Aegon Hypotheken B.V. (“Aegon” or the “Company”) and may contain marketing materials. Although the information in this presentation has been obtained from sources which the Company believes to be reliable, the Company does not represent or warrant its
Slide 3: Disclaimer (II)
Disclaimer (II) The Notes are not and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and will also not be registered with any authority competent with respect to securities in any state or other jurisdiction of the United States of America. The N
Slide 4: Disclaimer (III)
Disclaimer (III) The information contained herein may not be reproduced or redistributed (in whole or in part) in any format without the express written approval of the Company. Aegon is supervised by the Dutch central bank (De Nederlandsche Bank N.V.) (“DNB”) and the Dutch Authority for the Financi
Slide 5: Content
Content 01 Executive summary 04 Mortgage loan business & origination 07 Appendix I – Additional SAECURE 21 specifics Slides 6 - 7 Slides 21 - 26 Slides 41 - 45 02 SAECURE 21 – Transaction overview 05 The Dutch mortgage and housing market and Aegon’s place within 08 Appendix II – Generic Aegon Hypoth
Slide 6: Executive summary
Executive summary 6
Slide 7: Executive summary
Executive summary • The SAECURE 21 transaction includes EUR [•]m of [4.94]1 year Mortgage Backed Class A Notes that will be rated [AAA(sf)] / [AAAsf] by S&P Global Ratings and Fitch Ratings • The transaction benefits from a 25-year Interest Rate Cap with a [•]% strike price2 • The issuance is collat
Slide 8: SAECURE 21 Transaction overview
SAECURE 21 Transaction overview 8
Slide 9: Transaction highlights
Transaction highlights Capital structure Coupon up to and Class A Excess Note class Amount Status CE1 Coupon after FORD WAL4 FORD Final maturity S&P/ Fitch including FORD2 Consideration3 Min (3mE; [6.5]%) + [•] Max (3mE –[6.5]%; 0%) + [•] [October A [93.75%] Offered [7.5%] 3mE + [•] bps [4.94] yrs [
Slide 10: Portfolio characteristics (I)
Portfolio characteristics (I) Key characteristics Current loan to indexed market value 30% Principal balance € 649,741,374.91 Value of savings deposits € 9,739,776.14 19.8% 20% 17.8% 16.3% 15.9% Net principal balance € 640,001,598.77 12.6% 10% 6.9% 6.5% Construction deposits € 9,785,194.90 3.2% 0.1%
Slide 11: Portfolio characteristics (II)
Portfolio characteristics (II) Geographical distribution 0.9% 2.5% 0.3% Redemption type Annuity Drenthe 3.0% Bank savings 40.1% Interest only Flevoland 2.5% Life insurance Friesland 3.9% 53.8% Linear Gelderland 14.3% Savings Groningen 3.4% Limburg 5.8% 2.3% Noord-Brabant 13.7% 0.7% Noord-Holland 15.
Slide 12: Risk mitigating features
Risk mitigating features Credit enhancement Commingling risk Cash advance facility Set-off risk Subordination is provided by Class B • All borrowers pay into the Originator • Cash Advance Facility is [1.00]% of • Fitch and S&P have both considered Notes [6.25]% Collection Account (held at ABN the ou
Slide 13: Indicative amortization profile of the notes
Indicative amortization profile of the notes Assumptions Indicative amortization profile of Class A and B notes (6% CPR) 100% • Closing on [May 24, 2023] 90% • Call at the FORD 80% • No defaults / delinquencies 70% • CPR of 6% 60% 50% • No repurchases and further advances 40% 30% 20% WAL table of cl
Slide 14: Interest hedging arrangements
Interest hedging arrangements 25-year Interest Rate Cap • The Issuer will enter into an Interest Rate Cap agreement with BNP Paribas SA for 25 years with a strike price at [•]%1 • The Interest Rate Cap agreement complies with the structured finance criteria of S&P and Fitch • Under such Interest Rat
Slide 15: Indicative Class A revenue breakdown
Indicative Class A revenue breakdown Underlying assumptions • Three interest rate scenarios: 3m EURIBOR rates flat at [3]%, [5]%, and [8]% • The CPR is assumed to be [6.0]% throughout the life of the transaction Additional Amounts (LHS) • The expected losses are set at [5] bps annually Excess Consid
Slide 16: Aegon highlights
Aegon highlights 16
Slide 17: Position of Aegon Hypotheken
Position of Aegon Hypotheken Position of Aegon Hypotheken B.V. Simplified organization structure • On 27 October 2022 Aegon Group announced that it reached an agreement with a.s.r. to combine its Current legal structure Envisaged future legal structure1 Dutch pension, insurance, banking, and mortgag
Slide 18: The Netherlands at a glance
The Netherlands at a glance What we do Operating result In the Netherlands, Aegon is one of the best-known names in the (Q4 2022) Dutch financial sector, and a leading provider of life insurance and pensions. Our operations in the Netherlands also include banking, general insurance and mortgages 33
Slide 19: Aegon Hypotheken
Aegon Hypotheken Organizational setup Aegon Hypotheken Our mission Happy, loyal customers & advisors and a growing sustainable mortgage portfolio Locations Leeuwarden and The Hague Customers Over 278,000 mortgage clients (December 31, 2022) Employees Over 444 employees (internal & external, fte) (De
Slide 20: Aegon Hypotheken business model
Aegon Hypotheken business model We grow fee business through AuA increase, and enable asset strategies and spread generation for internal balance sheets by balancing origination and funding Customers Investors Client distribution Investor distribution Business (through IFA’s) model Balancing act Ava
Slide 21: Mortgage loan business & origination
Mortgage loan business & origination 21
Slide 22: Aegon Hypotheken mortgage-lending organization
Aegon Hypotheken mortgage-lending organization A trusted party Aegon Hypotheken is a Aegon applies the COSO framework for Since 2015, Aegon Hypotheken annually 100% subsidiary of Aegon Enterprise Risk Management (ERM) publishes an ISAE 3402 Type II Report1 Nederland Sales and advice is provided by U
Slide 23: Aegon in the Dutch mortgage market
Aegon in the Dutch mortgage market 5th largest mortgage lender with 5.5% market share in 2022 new issuance ABN AMRO 17.3% Rabobank 17.2% ING 11.5% NN 6.8% AEGON 5.5% Volksbank/SNS 5.2% Achmea 4.6% NIBC 4.3% MUNT 3.9% a.s.r. 3.7% Source: Land Registry (Kadaster) (FY 2022) 23
Slide 24: Diversified funding of Aegon's mortgage loans
Diversified funding of Aegon's mortgage loans Competitive advantages Nominal mortgage amounts Main characteristics ( (FY 2022 in EUR bn) • Strong position with independent financial advisors • Registered SBCB Programme, with a nominal value of outstanding bonds of EUR 0.5bn • Straight through proces
Slide 25: Diversified funding
Diversified funding Diversified funding sources allow Aegon to grow its portfolio New production Funding type Total Mortgage loan portfolio In EUR bn As % of total portolfio In EUR bn 10 9.5 80% 70 9 70% 7.4 60 8 6.5 60% 7 50 50% 6 40 5 40% 30 4 30% 3 20% 20 2 10% 10 1 0% 0 0 2006 2007 2008 2009 201
Slide 26: Key mortgage loan products
Key mortgage loan products Annuity mortgage loans Redemption types for new origination of mortgage loans of Aegon portfolio • Fixed monthly payments Repayment Source: Aegon (2006 – 2022) mortgage loans Linear mortgage loans 100% • Principal component comprising an equal, fixed amount each month 90%
Slide 27: The Dutch mortgage and housing market and Aegon's place within
7 The Dutch mortgage and housing market and Aegon’s place within
Slide 28: Facts and figures Dutch mortgage market
Facts and figures Dutch mortgage market Total mortgage production Lower demand in the second HDN registered 521,433 HDN registered a higher amounted to a level of time buyer & refinancing mortgage applications in 2022 number of applications €154bn (YoY -5.5%) in 2022 segment (YoY -7.3%) for refinanc
Slide 29: Policy developments Dutch mortgage market
Policy developments Dutch mortgage market Policies aimed at reducing risk and improving accessibility for first time buyers Introduction Desktop Implementation of automatic Introduction LTV 106% for Valuations Aegon LTV migration Temporary stricter underwriting sustainability measures Extended const
Slide 30: Policy developments Dutch mortgage market
Policy developments Dutch mortgage market Increasing mortgage rates Average mortgage rates: 100% LTV (Non NHG) Higher rates make refinancing and moving house 5.5% less attractive, which is currently leading to lower 5.0% mortgage market volumes 4.5% 4.0% 3.5% Impact on affordability for clients resu
Slide 31: Dutch housing price development
Dutch housing price development Housing prices have shown a decrease in recent MoM figures and are expected to further decrease in 2023. House price index development (Q3 2022) Regional house price development (YoY) 220 Belgium France Spain The Netherlands Denmark Germany 200 15.3% GR 13.8% 180 FR 1
Slide 32: Dutch housing market
Dutch housing market Changing household composition requires more supply Dutch household composition Dutch house supply Newly built properties and permits 8.5 100% 8.5 60% 120 120 Millions Millions Thousands 8.0 80% 8.0 100 100 80 80 7.5 60% 7.5 55% 60 60 7.0 40% 7.0 40 40 6.5 20% 6.5 20 20 6.0 0% 6
Slide 33: Aegon in the Dutch mortgage market
Aegon in the Dutch mortgage market Shift from longer term fixed rate periods towards 10 years Aegon production by interest reset Market production by interest reset Total transaction volume and Aegon date date Market share 600 8% 8% Thousands 12% 11% 12% 16% 16% 20% 23% 7% 28% 31% 500 34% 34% 38% 6%
Slide 34: Mortgage market segment
Mortgage market segment Mover mortgage Refinancing mortgage Strong decrease of refinancing in the market First time buyer • Increasing mortgage rates lead to a strong decline of the refinancing Aegon production by segment market 70% After peaking in March 2022, the refinancing market has seen a sign
Slide 35: SAECURE program performance
SAECURE program performance 35
Slide 36: Outstanding net balance of all SAECURE transactions
Outstanding net balance of all SAECURE transactions SAECURE 2 SAECURE 3 SAECURE 4 SAECURE 5 SAECURE 6 NHG SAECURE 7 SAECURE 8 NHG SAECURE 9 SAECURE 10 SAECURE 11 SAECURE 12 SAECURE 13 NHG SAECURE 14 NHG SAECURE 15 SAECURE 16 SAECURE 17 SAECURE 18 SAECURE 19 SAECURE 20 EUR m 10,000 9,000 8,000 7,000
Slide 37: Performance of SAECURE transactions
Performance of SAECURE transactions Performance of SAECURE transactions: Virtually no losses SAECURE net losses EUR m bps of net balance Outstanding net balance (LHS) Total net losses (RHS) In the aftermath of the debt crisis, total net losses 10,000 6.00 did not exceed 6bps of the net outstanding b
Slide 38: Performance of SAECURE transactions
Performance of SAECURE transactions Limited losses for most recent SAECURES Transaction information Asset balance at Closing Date Cumulative gross losses (at FORD)1 Cumulative recoveries (at FORD)1,2 Number of Cumulative losses Cumulative Transaction Closing Date FORD Number of loans EUR m EUR m EUR
Slide 39: Performance of SAECURE transactions
Performance of SAECURE transactions Very low level of arrears SAECURE arrears bps of net balance Strong performance thanks to our personalized, 3.00 2 <= 3 monthly payments 3 <= 4 monthly payments case-by-case approach that is focused on helping 4 <= 6 monthly payments > 6 monthly payments customers
Slide 40: Performance of SAECURE transactions
Performance of SAECURE transactions Realized monthly CPRs for SAECURE General conditions Realized annualized monthly CPRs for SAECURE Program2 A prepayment no longer needs to have a minimum value of EUR 1,000 CPR SAECURE 20 CPR SAECURE 19 CPR SAECURE 18 Prepayments do not release the customer from i
Slide 41: Appendix I – Additional SAECURE specifics
1 Appendix I – Additional SAECURE 21 specifics
Slide 42: Transaction parties
Transaction parties Key Transaction Parties Issuer SAECURE 21 B.V. Shareholder Stichting Holding SAECURE 21 Security Trustee Stichting Security Trustee SAECURE 21 Originators AEGON Hypotheken B.V. and AEGON Levensverzekering N.V. Seller AEGON Hypotheken B.V. Servicer AEGON Hypotheken B.V. Issuer Adm
Slide 43: Interest priority of payments
Interest priority of payments1 Available Revenue Funds Mortgage Loan Interest Senior expenses and servicing fee Interest on Issuer Accounts Credit insurance proceeds (interest) = Cash Advance Facility Interest on the Class A Prepayment penalties Replenishment of Class A PDL Net foreclosure proceeds
Slide 44: Principal priority of payments
Principal priority of payments1 Mortgage loan principal repayments and prepayments Available Principal Funds Credit insurance proceeds (principal) Unpaid interest on the Class A notes Net foreclosure proceeds of mortgage receivables (relating to principal) = Purchase of Further Advance Receivables 2
Slide 45: Comparison transactions
Comparison transactions Deal Name SAECURE 211 Green STORM 2023 Bastion 2022-1 NHG Prinsen Mortgage No. 1 SAECURE 20 NHG SAECURE 18 NHG Summary deal info Closing date • [May 2023] • March 2023 • November 2022 • April 2022 • April 2021 • July 2019 Class A size (EUR) • [•] • 500,000,000 • 368,500,000 •
Slide 46: Appendix II – Generic Aegon Hypotheken mortgage business information
6 Appendix II – Generic Aegon Hypotheken mortgage business information
Slide 47: Mortgage pricing overview
Mortgage pricing overview Pricing process focussed on optimizing Price optimization in a data driven Pricing innovation & improved pricing funder value pricing process grid Maximizing value: Our models and market Data driven: We operate state of the art Smart pricing: In the current market insights
Slide 48: Mortgage intermediaries
Mortgage intermediaries Aegon Hypotheken provides Aegon has a longstanding durable Net Promotor Score (aNPS) IFA’s mortgages through IFAs relationship with IFAs • Appointment based on possibility to do • Winner of the 2022 “Gouden Lotus Award”2 • aNPS3 declined over 2022 business in several branches
Slide 49: Aegon NL underwriting process
Aegon NL underwriting process Aegon’s underwriting department is All borrowers must meet all Aegon’s Our origination process is fully characterized by its quality of people underwriting criteria, no credit scoring automated • All underwriting decisions are taken by • Underwriting decisions based on
Slide 50: Aegon NL loan servicing
Aegon NL loan servicing Aegon’s servicing department is characterized by the quality Servicing processes are continuously improved and of its people automated for better serving our customers Aegon back office • All servicing decisions are taken by Aegon’s servicing department • Multiple servicing p
Slide 51: Credit management within Aegon NL
Credit management within Aegon NL Immediate action and a case-by-case approach Arrears management at Aegon Hypotheken • Focus on helping customers with their entire financial situation. Tailor made solution for every mortgage client which is or is expecting payment difficulties. • Intervention at 1s
Slide 52: Sustainability is a core part of Aegon Hypotheken's growth strategy
Sustainability is a core part of Aegon Hypotheken’s growth strategy Purpose Helping people live their best life Ambition Grow and expand our business to further strengthen our leading position in the mortgage value chain Business Grow fee business through AuA increase and enable asset strategies mod
Slide 53: Looking back at Q1 2023
Looking back at Q1 2023 Regulation Customer Journey / Product offering Reporting • European parliament voted in favor of the • 'Green mortgage week' in February 2023. In • Green Asset Ratio (GAR) reporting will also be new, more ambitious EPBD IV. A few this week, all teams will work full focus rele
Slide 54: What do we offer our clients and advisors?
What do we offer our clients and advisors? Existing products, proposition & services Loan-To-Value Loan-To-Income Services 1. Clients can borrow up to 106% LTMV for 1. Solely for Energy Saving Measures: a 1. HomeQgo tooling energy saving measures after construction. maximum of € 9K will not be taken
Slide 55: Proactive campaigns and nudges
Proactive campaigns and nudges Clients Advisors 1. Insights in energy label in ‘Mijn Aegon’ 1. Special campaigns together with advisors environment to activate the base about sustainability 2. Proactive e-mail campaigns segmented by 2. Extra content/marketing materials about energy label sustainabil
Slide 56: Impression of the tools
Impression of the tools https://www.aegon.nl/particulier/hypotheek/je-huis-verduurzamen 56
Slide 57: Thank you!
7 Thank you! Aegonplein 50, 2591 TV the Hague Telephone +31 70 344 3210 Postbus 202 2501 CE the Hague The Netherlands Helping people achieve a lifetime of financial security 57
Slide 58: For questions please contact
8 For questions please contact: Niels Roek Director of Funding & Liquidity Management T: + 31 6 2782 1038 E: NRoek@aegon.nl Erik Cremers Senior Structurer T: +31 6 2336 8138 E: erik.cremers@aegon.nl Rutger Nossin Structurer T: +31 6 2242 1106 E: rnossin@aegon.nl For questions relating to Aegon pleas