23rd Jul 2014 07:02
LONDON (Alliance News) - Phoenix Group Holdings Wednesday unveiled a refinancing of its senior debt structure as it looks to simplify and strengthen its balance sheet with a view to achieving an investment grade rating further down the line.
Phoenix also noted that the refinancing will support a sustainable dividend policy, and give it the financial muscle to continue to acquire closed life funds, while it also said that the move supports its plans to simplify group structure, including a potential future merger of its two largest UK life companies.
In a statement, the closed life assurance consolidator said that its new GBP900.0 million, unsecured, five-year bank facility will refinance the entirety of its existing two bank facilities and PIK notes, replacing its two legacy debt silos - Pearl and Impala - with a single debt facility.
Chief Executive Clive Bannister said that the new bank facility represents the next step in the group's development, following its return to the bond market earlier this month.
"The new facility allows us to simplify the group's structure and offers us greater flexibility as we execute our growth strategy," Bannister said in a statement.
"Furthermore, under the terms of the new agreement, we have the ability to further reduce the margin on the new facility as we seek a future investment grade credit rating," the CEO added.
The group said that a GBP206.0 million debt prepayment will be made on drawdown of the new facility, therefore reducing total senior debt by GBP500.0 million to GBP1.2 billion from its position at the start of the year. This consists of the new GBP900.0 million facility and the GBP300.0 million senior bond issued on July 7.
By Samuel Agini; [email protected]; @samuelagini
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