Plesner acts for Tryg Forsikring on the listing of DKK 2.3bn capital notes
Plesner has assisted Denmark’s largest insurance company, Tryg Forsikring, with the issue of NOK 850m and SEK 1.3bn of capital notes, so-called Tier 2 capital and the subsequent listing of the notes, together with SEK 1bn Restricted Tier 1 capital which Tryg Forsikring, with the aid of Plesner, issued in February, on Oslo Stock Exchange. The combined issuance and listing is one of the largest in the Nordics in recent years.
Tier 2 capital in many ways resembles Tier 2 capital issued by banks, including long maturity and the option to defer interest payments. It is, however, much less common for insurance companies to issue Tier 2 capital compared to banks.
Restricted Tier 1 capital has much in common with Additional Tier 1 capital issued by banks, for instance perpetual maturity, interest payments can be cancelled without constituting an event of default, and there is an option of compulsory write-down of the notes if Tryg Forsikring should face financial difficulties. However, there are also significant differences. In contrast to Additional Tier 1 capital issued by banks, the issue of Restricted Tier 1 capital for insurance companies is relatively rare with only a handful of issues in total in Scandinavia in recent years.
With a combined size of approximately DKK 2.3bn, the issuances far exceed other issuances of regulatory capital by Danish, and also most Nordic, insurance companies in recent years.
Danske Bank and Nordea acted as Joint Lead Managers on the issuances. The prospectuses for the issuances can be found here and here.
Tryg Forsikring has 4 million customers and 4,400 employees and is Denmark’s largest insurance company and one of the largest non-life insurers in the Nordic region. For the financial year 2020, Tryg Forsikring posted a profit of approx. DKK 2.8bn, and with a combined ratio of 84.5 (2020) it is one of the most profitable insurance companies in Denmark.