Direct Line Insurance Group PLC

Capital/Financing Update • Dec 8, 2017

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RNS Number : 8291Y

Direct Line Insurance Group PLC

08 December 2017

8 December 2017

Direct Line Insurance Group plc announces successful completion of capital management exercises

On 7 December 2017, Direct Line Insurance Group plc (the "Group") issued £350m of Perpetual NC10 Restricted Tier 1 ("RT1") notes with a coupon of 4.75%.  Proceeds of this issuance have primarily been used to fund the tender of half the Group's £500m 30NC10 9.25% Tier 2 debt (the "Tier 2 debt").

The tender offer resulted in the repurchase of £250m nominal of the Tier 2 debt at a value of c.£327m before accrued interest.  The remaining £250m (nominal) has a first call date of 27 April 2022.

Paul Geddes, Direct Line Group plc Chief Executive Officer said:

"We are pleased to announce the successful completion of our planned capital management exercises. These actions have improved the Group's capital structure, reduced on-going interest costs, improved financial flexibility and reduced the Group's refinancing risk.  The significant demand for the Group's debt recognises the strength of our operating model and the progress we've made since IPO."

Impact of transactions on financial results

The transactions benefit the Solvency Capital Requirement coverage ratio by circa 2ppt and there will be no material impact on the Group's dividend capacity as a result of the transactions.  The net result of these transactions will be an IFRS post-tax charge for the year ending 31 December 2017 of circa £53m.  The pre-tax charge will be taken primarily through the 'finance costs' line of the Group Income Statement.

The RT1 notes will be classified as equity under IFRS, accounted as 'other equity' and the coupon interest will be accounted for through the Group Consolidated Statement of Changes in Equity.

The Group will issue its 2017 preliminary results on 27 February 2018.

For further information, please contact:

Andy Broadfield	Jennifer Thomas
Director of Investor Relations	Head of Internal Communications & Experience
Tel: +44 (0)1651 831 022	Tel: +44 (0)1651 831 686

This information is provided by RNS

The company news service from the London Stock Exchange

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