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MAPFRE closes EUR500m subordinated bond issuance

MAPFRE has successfully placed the notes of a 30-year subordinated bond, with the call option at 10 years, for a total of EUR500 million, with a fixed interest rate set at 4.125 per cent for the first ten years.

The funds coming from this transaction will be used to further strengthen the Group’s financial flexibility, in addition to diversifying its sources of financing.
It is the first issue of this kind by a European insurer since March.
“This issuance further proves the confidence institutional investors have in MAPFRE. We have achieved very satisfactory financial conditions even in the current complex market environment,” says Fernando Mata, CFO of the company. It is the first issue of subordinated debt by a European insurer since March.
The success of the transaction can be seen in the reduction of the interest paid with respect to previous operations (4.125 vs 4.375 per cent in March 2017) and in the high demand, which exceeded 700 million euros, with broad diversification, which allowed for the bond to be placed among over 80 institutional investors in several European countries, highlighting Germany (20 per cent of the total issuance), Italy (19 per cent), United Kingdom  (17 per cent) France (14 per cent) and Spain (13 per cent).
Mutual fund managers represent the vast majority of the investors that have participated in the placement (67 per cent of the total), followed by insurers and pension fund managers (25 per cent).
This issuance is considered to be Solvency II complaint Tier 2 capital, thus reinforcing MAPFRE’s solvency and financial strength levels. The notes will be quoted on the AIAF market, upon authorisation from the Spanish Securities and Exchange Commission (CNMV).

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