FBD Holdings sold €50 million of junior bonds on Tuesday to help finance a deal to repurchase and cancel notes sold to Canadian financial group Fairfax three years ago to shore up its balance sheet at a time when the Irish insurer was loss making.
The Dublin-based company, led by chief executive Fiona Muldoon, said on Monday that it planned to redeem and cancel the €70 million of convertible bonds that were sold to Fairfax in 2015.
FBD will pay Fairfax €86 million in a deal that will also cancel the Toronto-based group’s right to convert the notes into a 19 per cent equity stake in Ireland’s only indigenous, publicly quoted insurer from next year.
The new so-called Tier 2 subordinated notes were priced on Tuesday to carry a coupon – or interest rate – of 5 per cent, some two percentage points below the rate attached to the 2015 bonds. Goodbody Stockbrokers managed the transaction.
“The strong pricing achieved by FBD is an endorsement and acknowledgement of the progress that FBD has made in recent years,” Ms Muldoon said.
