Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Debt Investor Presentation (October 2009)
16 slides from Insurance Australia's debt investor presentation, Oct 23, 2009
Slide 1: Proposed Amendments to Reset Exchangeable Securities
PROPOSED AMENDMENTS TO RESET EXCHANGEABLE SECURITIES INVESTOR PRESENTATION 23 October 2009
Slide 2: Disclaimer
DISCLAIMER • This presentation contains summary information about the proposed amendments to Reset Exchangeable Securities (“RES”), IAG Finance (New Zealand) Limited (“Issuer”), Insurance Australia Group Limited (“IAG”) and the IAG Group (i.e. IAG and its consolidated subsidiaries, including the Iss
Slide 3: Agenda
AGENDA 1 Overview of Existing RES 2 Proposed Amendments 3 The IAG Group 4 RES holder meeting 5 Further Information Appendix: Summary Amended RES and Amended Preference Shares Terms PAGE 3
Slide 4: Overview of Existing RES
1. OVERVIEW OF EXISTING RES • In 2005, IAG Finance (New Zealand) Limited (Issuer) raised A$550m Reset Exchangeable Securities • Proceeds were invested in a high quality, short-dated portfolio rated AAAf (S&P) • Existing RES pay quarterly, franked, floating rate interest payments at BBSW + 120 bps •
Slide 5: Proposed Amendments: What Is the Issuer Proposing to Do?
2. PROPOSED AMENDMENTS WHAT IS THE ISSUER PROPOSING TO DO? • Issuer proposes to amend the terms of the Existing RES and Preference Shares in a way designed to balance the interests of RES holders and the IAG Group • Amendments will require approval by resolution of RES holders at a meeting • Amendme
Slide 6: Proposed Amendments: Directors' Recommendation
2. PROPOSED AMENDMENTS DIRECTORS’ RECOMMENDATION The Directors of the Issuer consider that, on balance, it is in the best interests of RES holders to approve the proposed Amendments as they would be better off holding the Amended RES rather than holding the Existing Preference Shares This is support
Slide 7: Proposed Amendments: Key Amendments
2. PROPOSED AMENDMENTS KEY AMENDMENTS • Amended RES margin will be 400 bps for the first 10 years, a 1 Margin margin which may be reset at each Reset Date • Represents an increase from the Existing RES margin of 120 bps • If Amendments are not approved, Existing RES will be exchanged for Existing Pr
Slide 8: Proposed Amendments: Key Amendments
2. PROPOSED AMENDMENTS KEY AMENDMENTS • Amended RES margin may be reset at year 10 and on any Reset / subsequent Reset Date 4 step-up • Existing Preference Shares have a one-off step-up of 100 bps in margin to 220 bps in 10 years’ time • Holders of Amended RES can request conversion into Ordinary Ho
Slide 9: The IAG Group: Balance Sheet Impact
3. THE IAG GROUP BALANCE SHEET IMPACT Balance sheet impact on the IAG Group • RES and the Portfolio are currently set off and are thus off-balance sheet for the IAG Group • If Amendments are approved: • Amended RES become an IAG Group on-balance sheet liability • Funds raised by the Issuer will cont
Slide 10: The IAG Group: Group Capital Adequacy Position
3. THE IAG GROUP GROUP CAPITAL ADEQUACY POSITION Tier 1 capital Tier 2 capital 3,500 1,3 1,200 2 3 2,983 (100) 97 2,980 453 1,043 3,000 1,000 2,500 800 A$m A$m 2,000 590 600 1,500 1,000 400 500 200 0 Group Tier 1 Adjust for Amended RES Pro forma Tier 1 0 capital as at 30 exchange right treated as Ti
Slide 11: RES Holder Meeting: Voting Details
4. RES HOLDER MEETING VOTING DETAILS Voting options Attendance options • In person: A RES holder who is entitled to attend and cast a vote at the RES holder meeting (an “eligible RES holder”) may attend the RES holder meeting in person on 9 December 2009 to be held at Hilton Sydney, 488 George Stree
Slide 12: RES Holder Meeting: Key Dates
4. RES HOLDER MEETING KEY DATES Event Date Announcement of the proposed Amendments 23 October 2009 Notice of Meeting, Explanatory Statement and Proxy 4 November 2009 Form sent to RES holders Record date 2 December 2009 (to determine RES holders who are eligible to vote) Last date to lodge proxy vote
Slide 13: Further Information
5. FURTHER INFORMATION Clayton Whipp, Head of Group Finance 02 9292 1104 Alan Cazalet, Group Treasurer 02 9292 8451 Mark Gold, Deputy Group Treasurer 02 9292 2353 Tricia Ho, Capital Markets 02 9324 3939 Andrew Buchanan, Capital Markets 02 9324 2617 RES Information Line: 1300 666 635 www.iag.com.au/r
Slide 14: Appendix: Summary Terms
APPENDIX SUMMARY TERMS Feature Amended RES Amended Preference Shares Issuer IAG Finance (New Zealand) Limited, through its New Insurance Australia Group Limited Zealand branch Issue Credit Rating ‘A-’ by S&P1 ‘A-’ by S&P2 Regulatory capital Will qualify as Innovative Tier 1 Capital on a Level 2 Will
Slide 15: Appendix: Summary Terms
APPENDIX SUMMARY TERMS Feature Amended RES Amended Preference Shares Source of distributions The Issuer. The Portfolio will not be a feature of the IAG Amended RES Distribution payment The Directors not having passed a resolution not to pay The IAG Directors passing a resolution to pay and the tests
Slide 16: Appendix: Summary Terms
APPENDIX SUMMARY TERMS Feature Amended RES Amended Preference Shares Issuer Redemption, The Issuer may Redeem, Convert or Resell: IAG may Redeem, Convert or Resell: Conversion or Resale • all or some Amended RES on any Reset Date; • all or some Amended Preference Shares at any time, • all or some Am
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