Allianz said Tuesday it placed 500 million euros of 30-year convertible subordinated notes to be purchased by Nippon Life Insurance Company (Nippon Life). The notes will be issued by Allianz Finance II B.V., a finance subsidiary wholly owned by Allianz SE, Munich (Allianz), and will be callable by the issuer after 10 years and guaranteed by Allianz. The transaction is expected to close on July 7, 2011.
Within 10 years after issuance and under certain conditions the notes can automatically convert into Allianz common stock. In addition, Nippon Life has the option to exchange the notes for common stock issued by Allianz within 10 years after issuance.
“The objective of this investment is to establish a long-term partnership that is mutually beneficial for both companies,” said Yoshinobu Tsutsui, President of Nippon Life Insurance Company. “We are very pleased to have the opportunity to strengthen our relationship with Allianz, which shares similar values and beliefs with Nippon Life regarding the insurance business.”
“I am delighted that we were able to close this transaction with such an important and trusted partner,” said Michael Diekmann, chairman of the board of management of Allianz SE. “With this transaction, we are among the first companies to participate in the growing market for contingent convertible notes.”
Nippon Life provides a broad array of products including whole life, medical, nursing coverage and annuities in Japan. As the world’s largest mutual life insurance company with a formidable capital base, Nippon Life focuses on constantly serving the best interests of its customers by providing “consistent protection” and “superior services” over the long term. At the end of FY2010, Nippon Life had total assets of 50 trillion yen (424 billion euros) and total revenues of 6.6 trillion yen (57 billion euros).
Allianz, together with its customers and sales partners, is one of the strongest financial communities. More than 76 million private and corporate customers rely on Allianz’s knowledge, global reach, capital strength and solidity to help them make the most of financial opportunities and to avoid and safeguard themselves against risks. In 2010 151,000 employees in 70 countries achieved total revenue of 106.5 billion euros and an operating profit of 8.2 billion euros. This business success with insurance, asset management and assistance services is based increasingly on customer demand for crisis-proof financial solutions for an ageing society and the challenges of climate change.