Aegon today announces that it will call for the redemption of junior perpetual capital securities with a coupon of 6.875% issued in 2006 (ISIN code: NL0000686368).
The redemption will be effective March 15, 2014, when the principal amount of USD 550 million will be repaid with accrued interest.
Aegon’s decision to call the perpetual capital securities supports the company’s target to lower its gross financial leverage ratio to within a range of 26 to 30%. The redemption will improve Aegon’s gross financial leverage ratio by 1.2 percentage points and reduce future interest costs, improving the company’s fixed charge coverage by approximately 0.6 times.
The securities are currently listed on the New York Stock Exchange with symbol AEV. This listing will be terminated following the redemption of the securities.
Currently, junior perpetual capital securities are included as capital in Aegon’s group IGD solvency ratio. The redemption of these securities will negatively impact Aegon’s group IGD ratio by approximately six percentage points. On September 30, 2013, the pro forma group IGD solvency ratio including the repayment of the securities would have been approximately 202%. Aegon’s continued strong solvency ratio demonstrates the company’s long-term commitment to maintaining a solid capital position.