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Swiss Re Completes Debut Debt Offering

Paul, Weiss client Swiss Re Ltd, the holding company for the Swiss Re Group, entered into a novel funding arrangement under which it has secured the right to access up to $700 million of funding at current interest rates, which it can draw down essentially on a revolving basis under a loan issuance facility agreement, based on an offering in the capital markets by an unaffiliated repackaging vehicle. Swiss Re receives regulatory capital credit for the funding at the time it elects, or is required, to draw down under the loan issuance facility.  At closing, investors will have purchased $700 million of fixed-to-floating rate non step-up callable loan notes with a scheduled maturity in 2050, issued by the repackaging vehicle. The net proceeds are to be used by the repackaging vehicle to acquire U.S. Treasury securities. At each drawdown, Swiss Re in effect receives U.S. Treasury securities, which it can then hold or liquidate to meet capital and liquidity requirements for its operating businesses, in return for issuances of hybrid securities under the funding facility to the repackaging vehicle. While this is the first offering at the holding company level, under the Swiss Re structure put in place in 2011, this is another in a long line of novel hybrid securities issued by the Swiss Re Group.

The Paul, Weiss team included securities partner Mark Bergman and counsel John Satory. Assistance on tax matters was provided by partner David Mayo in the New York office.

November 6, 2015

Paul, Weiss Team

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