Prudential Plc · LSE:PRU
Prudential — Debt Investor Presentation (May 2019)
23 slides from Prudential's debt investor presentation, May 2019
Slide 1: Prudential plc Consent Solicitation Proposal
Prudential plc Consent Solicitation Proposal May 2019 1
Slide 2: Important Notice
IMPORTANT NOTICE THIS DOCUMENT MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THE DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION
Slide 3: Transaction Background & Rationale
Transaction Background & Rationale • On 14 March 2018, Prudential plc announced its intention to demerge M&GPrudential, its UK and Europe business, from Prudential plc resulting in two separately-listed companies (the “Demerger”) • The Demerger will enable the businesses to pursue distinct strategie
Slide 4: Transaction Fee Summary
Transaction Fee Summary • If implemented, Prudential plc will compensate investors by paying: a) In respect of the 2055 Note, total consideration of 130bps running (equivalent to an indicative total of 14.5% upfront, split into two components): i. A fee of 8.500% (which includes an Early Voting Amou
Slide 5: M&GPrudential Update
M&GPrudential Update
Slide 6: Demerger of M&GPrudential
Demerger of M&GPrudential Target structure: distinct investment prospects Prudential plc M&GPrudential Prudential Prudential Assurance Prudential Africa Jackson National M&G Investments Corporation Asia Company CEO: Mike Wells CEO: John Foley HQ: London HQ: London Premium Listing: LSE Premium Listin
Slide 7: M&GPrudential
M&GPrudential Background Market trends Established International asset manager with more than 85 Self-reliance for savings, investment and 1931 years’ experience retirement Offer funds across diverse geographies, asset Substantial household assets still held in cash classes and investment strategies
Slide 8: M&GPrudential Competitive advantages unrivalled in our peer group
M&GPrudential Competitive advantages unrivalled in our peer group Differentiated Strong distribution Customer investment with international solutions focus 1 capability Strength in less 2 2 With-profits, multi-asset, 3 growth Retail, wholesale and commoditisable segments institutional institutional
Slide 9: €10trn+ opportunity for M&GPrudential
M&GPrudential Combination of global trends and competitive advantages create an immense opportunity for M&GPrudential Global Opportunities Retirement Retirement assets outside US and Asia (US$)1 62% fall in UK annuities Opportunity $11.5trn market since DB and DC pension assets pensions freedoms2 Ho
Slide 10: Leveraging a broad range of capabilities to deliver outstanding solutions
M&GPrudential Leveraging a broad range of capabilities to deliver outstanding solutions Delivering superior Successfully diversified Broad range of established investment investment capabilities performance • Differentiated investment 88 Growth Fixed 321 2008-2018 income capabilities in hard to repl
Slide 11: Group: Progress towards demerger
Group Progress towards demerger Completed the legal transfer of the HK business Completed reinsurance of £12bn UK annuity book to Rothesay Life Good progress with Part VII transfer HKIA announced as future Group-wide supervisor Raised £1.6bn of new subordinated debt1 Established new hold
Slide 12: FY18 financial highlights
M&GPrudential FY18 financial highlights IFRS operating profit, £m Operating free surplus generation, £m IFRS operating profit Cash generation +19% +21% 1,378 1,634 1,311 1,582 FY17 FY18 FY17 FY18 Embedded value, £bn Local solvency capital position PAC shareholder Solvency II surplus1, £bn, % Embedde
Slide 13: Solvency II capital surplus
M&GPrudential Solvency II capital surplus Shareholder Solvency II capital surplus1,2, £bn Policyholder Solvency II capital2, £bn Cover YE17 178% (28)pts 150% 172% Cover ratio 231% 201% 6.1 0.1 Surplus £5.5bn £4.8bn (4.2) 0.1 (0.3) 3.7 (3.3) 1.1 (0.1) 2.8 9.7 Includes £0.4bn of one-off items 4.2 31 D
Slide 14: Expected capital position at demerger
M&GPrudential Expected capital position at demerger M&GPrudential Solvency II capital position, pro-forma at demerger £bn Cover ratio 172% c.170% • M&GPrudential expected to hold c£3.5bn of sub-debt • M&GPrudential SII cover expected to be c170% at demerger around 8.8 3.5 • M&GPrudential Group ratin
Slide 15: Proposal
Proposal
Slide 16: Proposal Overview
Proposal Overview • Prudential plc has made good progress with the proposed Demerger: ‒ c. £1.6bn (£ eq.) of Tier 2 issued in September 2018, which included an Issuer Optional Substitution provision to facilitate the substitution of these notes to M&GPrudential on or prior to the Demerger ‒ Successf
Slide 17: Voting Fee
Voting Fee Compensation Prudential plc is proposing to compensate investors for their agreement to this Proposal: Upfront Fee • Eligible Holders who submit an Instruction in relation to the Notes will be eligible to receive a total early voting consideration of 8.50% (in respect of the 2055 Notes) a
Slide 18: Voting Requirements & Indicative Timeline
Voting Requirements & Indicative Timeline Voting requirements (Extraordinary Resolutions) First Meeting Adjourned Meeting Quorum Requirements 2055 Notes A clear majority of the nominal amount 2055 Notes Whatever the nominal amount held / One or more Eligible Holders outstanding represented holding o
Slide 19: Key Contacts
Key Contacts Prudential plc Solicitation Agents Tabulation Agent Treasury BNP Paribas Lucid Issuer Services Limited Elisabeth Wenusch Phone: +44 20 7595 8668 Phone: +44 207 704 0880 Tel: +44 (0)20 3977 3599 Email: [email protected] Attention: David Shilson Email: prudential@lucid-i
Slide 20: Appendix
Appendix
Slide 21: Proposed Substitution Amendments for the Notes
Proposed Substitution Amendments for the Notes Extract from the Consent Solicitation Memorandum • For ease of reference, the following extract shows the additions that will be made to Condition 15.4 if the Amendment is implemented: (b) Subject as provided in the Trust Deed, the Trustee shall, at the
Slide 22: 2063 Note – Solvency II Modifications
2063 Note – Solvency II Modifications • In order to ensure that the 2063 Note is capable of recognition and valuation as Tier 2 basic own funds of New M&GPrudential HoldCo under Solvency II following any such Substitution, it is also intended that (subject to the approval by the Holders of the Amend
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