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QBE - QBE Insurance News Story

A$8.83 -0.1  -0.6%

Last Trade - 29/05/20

Sector
Financials
Size
Large Cap
Market Cap £6.21bn
Enterprise Value £8.52bn
Revenue £11.85bn
Position in Universe 42nd / 1842

UPDATE 1-QBE Insurance's dollar 'gender equality bond' more then 20-times oversubscribed

Mon 13th November, 2017 9:46am
(Adds comments, context) 
    HONG KONG, Nov 13 (Reuters) - Australia's QBE Insurance 
Group  QBE.AX  drew applications of more than $8.25 billion for 
a $400 million "gender equality bond", bankers said, marking the 
first such issuance denominated in a G3 currency. 
    Bonds like the ones QBE sold invest in paper issued by 
companies that support workplace gender equality. 
    The QBE bond, a capital note that is eligible for inclusion 
as the financial institution's additional Tier 1 Capital, is the 
first "gender equality bond" issued in a G3 currency--U.S. 
dollars, euro and yen--a banker involved in the deal said. 
    In March, National Australia Bank  NAB.AX  issued a gender 
equality bond that was the first of its kind, the banker said. 
That bond was denominated in Australian dollars. 
    QBE's perpetual bond, callable after 7-1/2 years, was priced 
last week at a yield of 5.25 percent, 50 basis points inside the 
initial price guidance following the strong orders. 
     In secondary trading, the bonds traded as high as 101.50 
cents on the dollar, reflecting strong investor backing. 
     "The bonds performed extremely well in secondary due to 
both strong technicals in a low rates environment and investor 
demand for ESG bonds," said Raymond Lee, portfolio manager for 
Kapstream Capital referring to environmental, social, governance 
(ESG)investments. 
    "The focus on ESG among the general investor base continues 
to grow, and the rarity of ESG bonds in additional Tier 1 format 
supports bonds technicals." 
    Funds raised will be invested in bonds issued by companies 
that have policies of supporting workplace gender equality. 
    QBE Insurance Group Treasurer Paul Byrne said the universe 
of companies includes those that have signed up to the United 
Nations seven principles on Women's Empowerment and entities 
referenced in the Equileap 2017 Gender Equality Report. He said 
QBE could issue more such bonds. 
    Demand for ESG products has grown as the asset class finds 
greater mainstream acceptance among institutional investors. 
    Japan's Government Pension Investment Fund (GPIF), the 
world's largest pension fund with $1.3 trillion under 
management, plans to raise its allocation to environmentally and 
socially responsible investments to 10 percent of its stock 
holdings from 3 percent. 
    QBE's bonds were mainly taken up in Asia with 51 percent 
participation and Europe and Middle East which accounted for 37 
percent, while U.S. made up 12 percent of the deal. 
    Real money accounts dominated the deal with fund managers 
comprising 86 percent. Private banks took up nine percent, 
insurance companies three percent and others two percent. 
 
 (Reporting by Umesh Desai; Editing by Richard Borsuk and Sam 
Holmes) 
 ((umesh.desai@thomsonreuters.com; +852-2843-6935; Reuters 
Messaging: umesh.desai.thomsonreuters.com@reuters.net; Twitter 
@umesh_desai)) 
 
Keywords: QBE DEBT/BONDS
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