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Business

Allianz to Sell Four Billion in Bonds

German insurance giant Allianz said Wednesday it was planning to sell nearly €4 billion ($5.2 billion) in bonds and stocks in order to reduce its share portfolio, cut debt and boost capital. Allianz said in a statement it planned to issue up to €1.2 billion in three-year DAX index linked notes, exchangeable for shares in BMW, Munich Re or Siemens. "As a result of this transaction, we will further reduce our equity gearing," Allianz explained. Europe's largest insurer also said it would issue €1 billion in so-called perpetual subordinated bonds to help refinance €2.7 billion in bonds maturing this year. Allianz said it would have the right to call the perpetual bond after 12 years. The exact amount, coupon and yield would be determined at the end of a book-building period. Attached to the bond would be 11.2 million warrants on Allianz shares with a maturity of three years. Once the bond had been issued, the warrants would be "detached and placed in firm hands, thereby avoiding any material impact on the Allianz share price," Allianz said. The bond ex-warrants would be placed with institutional investors.

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