Prudential Plc · LSE:PRU
Prudential — Debt Investor Presentation (July 2018)
22 slides from Prudential's debt investor presentation, Jul 25, 2018
Slide 1: Prudential plc Senior Bondholder Consent Solicitation
Prudential plc Senior Bondholder Consent Solicitation 25 July 2018 1
Slide 2: Forward-looking statements
This document may contain ‘forward-looking statements’ with respect to certain of Prudential's plans and its goals and expectations relating to future financial condition, performance, results, strategy and objectives of Prudential or any other member of the Prudential group. Statements that are not
Slide 3: Agenda
Agenda Transaction Background & Rationale Prudential plc Consent Solicitation 3
Slide 4: Transaction Background & Rationale
Transaction Background & Rationale • On 14 March 2018, Prudential plc announced its intention to demerge M&G Prudential, its UK and Europe business, resulting in two separately-listed companies (the “Demerger”) • The Demerger will enable the businesses to pursue distinct strategies aligned to their
Slide 5: Transaction Background & Rationale
Transaction Background & Rationale • In summary, the rationale for the Demerger of M&G Prudential from Prudential plc is to deliver: – Better alignment: Different characteristics and opportunities – Enhanced execution: Greater agility and increased speed in execution – Value creation: Enhancing long
Slide 6: Target structure after Demerger: two separately listed companies
Transaction Background & Rationale Target structure after Demerger: two separately listed companies Prudential plc M&G Prudential Prudential Prudential Assurance Prudential Africa Jackson National M&G Investments Corporation Asia Company CEO: Mike Wells CEO: John Foley HQ: London HQ: London Premium
Slide 7: Transformation of Group portfolio from UK centric to international focus
Transaction Background & Rationale Transformation of Group portfolio from UK centric to international focus Evolution of mix EEV shareholders’ funds1, % International 28% International 26% 49% 72% 44% 51% £15bn £45bn 23% 28% 2007 2017 UK centric International focus • Leading Pan-regional Asia busine
Slide 8: Agenda
Agenda Transaction Background & Rationale Prudential plc Consent Solicitation 8
Slide 9: A pre-eminent global insurer, capturing structural growth
Prudential plc A pre-eminent global insurer, capturing structural growth Diversified and High Quality Earnings Asia IFRS Op. Profit Mix5 IFRS Op. Profit Eastspring (9%) Complementary operating Asian growth P Others (3%) Asia Mix4 markets, with ability to leverage US 47% Philippines (2%) Better exper
Slide 10: Group IFRS: Key drivers of earnings momentum
Group IFRS Key drivers of earnings momentum Group IFRS operating profit Group IFRS operating profit £m £m Change FY16 (CER) 4,429 FY161 FY17 (CER) Asia 255 Asia 1,644 1,975 +15% US fee business3 187 UK&E core life and 71 US 2,048 2,224 +3% asset management UK&E other4 54 UK&E 1,253 1,378 +10% US oth
Slide 11: Asia IFRS: Strong and consistent growth
Asia IFRS Strong and consistent growth Life Asset management IFRS operating profit IFRS operating profit £m £m +15% +18% Renewal Average premiums +22% AUM1 +20% £11.6bn £128bn 1,571 1,799 176 Insurance 149 External net income +21% inflows £3.1bn £1.3bn vs £1.8bn FY16 FY17 FY16 FY17 2016 (CER) (CER)
Slide 12: US IFRS: Driven by fee earnings from VA business
US IFRS Driven by fee earnings from VA business Fee-based1 Spread-based2 IFRS operating profit IFRS operating profit 3 £m £m +12% Av. separate account AUM +17% (6)% £125bn Spread (24)bp 1,601 1,788 margin Fee 339 margin (3)bp 317 193bp 187bp FY16 FY17 FY16 FY17 (CER) (CER) Higher separate account
Slide 13: Key credit strengths
Prudential plc Key credit strengths • Market leading businesses, in world’s largest insurance and savings markets • Sustainable competitive advantages in markets with long-term structural growth drivers • Long-term track record of profitable growth • High quality diversified earnings and cash genera
Slide 14: Very strong credit and financial strength maintained
Prudential plc Very strong credit and financial strength maintained Operating subsidiary AA-1 A12 AA-2 financial strength Prudential plc Senior unsecured credit: Long-term A A2 A- Short-term A-1 P-1 F1 **All ratings on stable outlook** 1. Refers to rated operating subsidiaries of Prudential plc: Jac
Slide 15: Rating agencies' summary view & key rating drivers
Prudential plc Rating agencies’ summary view & key rating drivers1 • “On March 14, 2018, U.K.-based global multiline insurance group • “The ratings of Prudential plc (”Prudential” or “Group”, senior debt • “(…) Fitch has concluded that PAC, the main insurance operating Prudential PLC (the group) ann
Slide 16: Agenda
Agenda Transaction Background & Rationale Prudential plc Consent Solicitation 16
Slide 17: Consent Solicitation Request
Consent Solicitation Request • Request to support the proposal allowing Prudential plc to amend existing terms & conditions of the Bonds in order to avoid a potential Event of Default – Specifically, condition 8(viii) of the terms & conditions of the 2023 and 2029 Bonds restricts Prudential plc from
Slide 18: Voting Fee
Voting Fee • Upfront voting fee – 2.0pts and 11.0pts for the 2023 and 2029 Bonds, respectively – Step down to 0.5pts and 3.5pts respectively post the Early Voting Deadline – The upfront fee has been agreed with a Special Committee (the “Special Committee”) of The Investment Association (“IA”). The m
Slide 19: Voting Requirements & Indicative Timetable
Voting Requirements & Indicative Timetable Voting requirements First meeting Adjourned meeting Quorum Requirements: Two or more persons holding or representing a clear majority Two or more persons holding or representing Bondholders Extraordinary Resolutions in principal amount of the Bonds for the
Slide 20: Contacts
Contacts Treasury Requests for copies of the Consent Solicitation Memorandum and information in relation to the procedures for submission of an Instruction Elisabeth Wenusch should be directed to the Tabulation Agent: Tel: +44(0)20 7548 3538 Investor Relations Lucid Issuer Services Limited Richard G
Slide 21: Appendix
Appendix Ty PRUDENTIAL
Slide 22: Proposed Amendment
Proposed Amendment Extract from Consent Solicitation Memorandum Amendment of the 2023 Bonds and the 2029 Bonds If: a) the 2023 Extraordinary Resolution is passed and the Amendment is subsequently implemented in respect of the 2023 Bonds, the 2023 Bond Conditions will be modified by: i. the deletion