Debt programs
Aegon has access to international capital markets under a USD 6 billion debt issuance program. Access to the capital market in the United States is made possible by a separate shelf registration.
Aegon also has access to domestic and international money markets through its EUR 2.5 billion commercial paper programs. (See the capital & liquidity section of Aegon's Integrated Annual Report for more details.)
To support its commercial paper programs and need for Letters of Credit (LOCs), and to enhance its liquidity position, Aegon maintains backup credit and LOC facilities with international lenders.
The company's principal arrangement is a EUR 2 billion syndicated revolving credit facility maturing in 2019, and an additional LOC facility of USD 2.6 billion, which matured in 2021.
In addition, Aegon also maintains various shorter-dated bilateral backup liquidity, and committed and uncommitted LOC facilities.
- To promote strong capital adequacy in Aegon's businesses and operating units;
- To manage and allocate capital efficiently in support of the strategy and in line with its risk tolerance;
- To maintain an efficient capital structure with an emphasis on optimizing Aegon's cost of capital;
- To ensure adequate liquidity in the operating units and at the holding to make sure that the Company is able to meet its obligations by enforcing stringent liquidity risk policies; and
- To maintain continued access to international capital markets on competitive terms.
Aegon believes these guiding principles together strengthen Aegon's ability to withstand adverse market conditions, enhance its financial flexibility and serve both the short-term and the long-term interests of Aegon, its customers and other stakeholders.
Management and monitoring of capital and liquidity is firmly embedded in Aegon's ERM framework, and is in line with Aegon's risk tolerance. Aegon's risk tolerance focuses on financial strength, continuity, steering the risk balance and the desired risk culture. Its core aim is to assist management in carrying out Aegon's strategy within the Group's capital and liquidity resources.
Management of capital
The Company's overall capital management strategy is based on adequate solvency capital, capital quality and the use of leverage.
Capital adequacy
Aegon's goal for both its operating units and for the Aegon Group as a whole is to maintain a strong financial position and to be able to sustain losses from adverse business and market conditions. The capitalization of Aegon and its operating units is managed based on the most stringent of local regulatory requirements and self-imposed criteria.
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