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Swiss Re Completes $750 Million Capital Instruments Offering
Practices
On March 29 our client Swiss Reinsurance Company Ltd completed an offering of $750 million of perpetual subordinated capital instruments. The instruments were issued through a so-called "repackaging vehicle." The offering follows Swiss Re's direct offering of CHF 320 million of perpetual subordinated notes, which closed in February. Similar to the Swiss franc notes, the dollar-denominated instruments contain a novel stock settlement feature under which holders will receive listed shares of Swiss Re Ltd, the parent company of the Swiss Re Group, in settlement for the notes, at the option of the issuer.
The Swiss Re offering has attracted significant commentary, with EuroWeek noting the "unique structure" and that "[Swiss Re] has set out with the aim of . . . leading the market in new-style insurance hybrids." While the Swiss franc notes were sold in the Swiss market only, the dollar-denominated instruments were sold principally to Asian private banking accounts and European institutional accounts.
Paul, Weiss corporate partner Mark S. Bergman advised Swiss Re on the transaction.