Allianz gets tight pricing in hybrid Swissie

Allianz achieved the smallest coupon ever for an insurance hybrid issue in the Swiss franc market in January when it sold a Sfr500m (Eu408m) perpetual non-call five-and-a-half-year issue, according to a lead syndicate banker.

The transaction was launched on 22 January, with the German insurer having laid the groundwork for the deal with presentations and one-on-one meetings in Zurich and Geneva the preceding two days, for which investors turned out in strong numbers, according to the syndicate official.

Deutsche, UBS and Zürcher Kantonalbank soft-sounded the resettable fixed rate transaction at a coupon of 3.375%-3.625% in the afternoon on 21 January, with a positive response from investors allowing the leads to officially open order books for a Sfr500m deal the following day with price guidance of the 3.25% area.

The order books were closed after 20 minutes and the issue was priced at 3.25%, equivalent to 257.3bp over mid-swaps. This is the lowest coupon achieved on a hybrid issue in the Swiss franc market by an insurer, according to the syndicate official.

He said that a larger deal would have been possible based on the level and quality of demand, but that the issuer opted to size it at Sfr500m for the sake of good secondary market performance.

The deal was Allianz’s first subordinated deal ever in the Swiss franc market, according to the banker.

Swiss investors were allocated 92% of the bonds, and others 8%. Banks took 57%, asset managers 26%, and insurance companies 12%.