Aviva receives strong demand for subordinated debt transaction

Article date: 22 September 2003

On 10 September 2003 Aviva plc (Aviva) announced that itintended to raise around £1.2 billion of subordinated debt tosupport future growth and enhance further the group’s capitalposition. Aviva now confirms that due to very strong investordemand, after a European-wide roadshow, it will raise a totalamount equivalent to £1.6 billion.

The issue, which will be denominated in sterling and euros, waspriced on Friday 19 September and is due for settlement on 29September 2003.

The issue included a €650 million Euro 20-year datedtranche callable in 2013 priced at a fixed rate of 5.25% (based ona spread of 108 basis points over the Euro ten-year mid-swap rate);a €500 million Euro perpetual tranche callable in 2015 pricedat a fixed rate of 5.70% (based on a spread of 135 basis pointsover the Euro twelve-year mid-swap rate); and a £800m Sterlingperpetual tranche callable in 2022 priced at a fixed rate of 6.125%(based on a spread of 140 basis points over the 8% Gilt due2021).

The transaction is expected to be rated A-/A2 by Standard andPoor’s and Moody’s respectively and will be listed onthe London Stock Exchange.

Mike Biggs, Aviva’s group finance director, commented:“We have seen very strong demand for our subordinated debtissue from investors in the UK and Continental Europe. The issuewas three times oversubscribed enabling us to achieve veryattractive pricing. This is cost effective long-term core capitalfor the group.”

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Enquiries: Analysts
Steve Riley, Investor Relations Director +44 (0)20 7662 8115

Media
Sue Winston, Head of Group Media Relations +44 (0)20 76628221
Alex Child-Villiers, Financial Dynamics +44 (0)20 7269 7107

Notes to editors:

  • Aviva is the UK’s largest insurance group and theworld’s seventh-largest insurer based on worldwide grosswritten premiums.
  • The joint bookrunners for the subordinated debt issue wereBarclays Capital, Goldman Sachs, Lehman Brothers and SG Corporate& Investment Banking.

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