Challenger Limited · ASX:CGF
Challenger — Merger or Acquisition (February 2007)
8 slides from Challenger's merger presentation, Feb 28, 2007
Slide 1: Challenger Assumes MetLife Annuity Liabilities
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Slide 2: Transfer of MetLife Portfolio
Transfer of MetLife Portfolio MetLife Insurance Limited (‘MetLife’) will transfer its Australian annuity, allocated pension and personal superannuation portfolio to Challenger The portfolio is almost $2 billion Supporting assets include: Approximately $1 billion investment grade fixed income assets;
Slide 3: Transaction overview
Transaction overview Assets and liabilities will be transferred under Part 9 of the Life Insurance Act Targeted to complete on to 30 June 2007 The transfer also involves Challenger taking over all the shares of MetLife Trustee Pty limited (the MetLife Superannuation Trustee) Economic exposure to the
Slide 4: Committed participant in the annuity market
Committed participant in the annuity market Total size of annuity funds 31 December 2006' Other 18% Challenger 17% — BT (ex WBC) ey 6% MetLife ~~ 438% Comminsure 13% 4 1 Plan for Life 31 December 2006 Transfer will strengthen Challenger’s position in the capital guaranteed pension sector Challenger
Slide 5: Enhanced financial strength leverages capabilities
Enhanced financial strength leverages capabilities Asset Management has capabilities to optimise yield from assets Increased balance sheet scale leverages Asset Management's skills and capabilities Origination Structuring Transacting / Managing Assets Asset Management's acquisition capability double
Slide 6: Cost effective funding
Cost effective funding Cost-effective funding — below bank bill rate Additional funding for pipeline of investments Significantly raises investment level before capital constraints arise Portfolio has similar characteristics to existing CL2 portfolio Positive impact on liquidity challenger 2
Slide 7: MetLife — liabilities to be transferred
MetLife — liabilities to be transferred / | Personal, | Superannuation) De yanlegd ic a Allocated Pensian | mediate Apnuities, Plan oe Aonuity, Superannuation savings A term certain immediate and accumulation annuity providing a regular Allocated pension plan product. Also income for a selected term
Slide 8: Asset Allocation Plan
Asset Allocation Plan CL2 works within the bounds of a target Asset Allocation Plan: 30/30/30/10 Following transfer there will be an initial shift in the allocations: 50/20/20/10 Future asset allocation will be reviewed against our current target mix - Any changes will need to optimise our return on