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M&G makes bond tender offers in GBP450 million deleveraging plan

10th Jun 2024 10:38

(Alliance News) - M&G PLC on Monday said it will take a series of actions to reduce debt by up to GBP450 million, including buying back bonds and not replacing them.

M&G shares were up 2.1% to 202.50 pence Monday morning in London. The wider FTSE 100 index was down 0.5%.

London-based investment manager said the action plan was part of its commitment to reduce its Solvency II leverage ratio to 30% or less by 2025.

M&G said it will redeem its GBP300 million in 3.875% resettable dated Tier 2 notes in full next month and not replace these. It also will make tender offers for up to GBP150 million in its four other Tier 2 notes.

The company noted that its Solvency II coverage ratio stood at a strong 203% as of the end of March, even after paying the final dividend for 2023. M&G expects only a moderate impact on that coverage ratio from the deleveraging plan, saying it will remain "comfortably" above its target operating range of 160% to 190%.

In its annual results back in March, M&G had reported a GBP216 million restriction to Tier 2 and Tier 3 capital, and the deleveraging plan will address this, making it "immaterial".

"Today's announcement demonstrates the strength of our commitment to investors, and our continued focus on delivering on our three strategic priorities: financial strength, simplification and growth," said Chief Executive Officer Andrea Rossi.

By Tom Waite, Alliance News editor

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