Partnership is planning its first bond issuance to help fund a drive to make the insurer less reliant on traditional annuities following the devasting impact of the Budget reforms on the market.
The specialist insurer has mandated Bank of America Merrill Lynch and Royal Bank of Scotland to arrange meetings this week with fixed income investors who may be interested in purchasing sterling-denominated subordinated debt.
It says it is “in shareholders’ interests to explore opportunities to provide the financial flexibility to invest in new initiatives and to diversify the group’s sources of funding”.
At a meeting in November, Partnership chief executive Steve Groves updated investors on plans for a US launch of a “care annuity” and said there was a strong market for bulk annuities sold to defined benefit pension funds.
Partnership’s annuity sales have plummeted over 50 per cent since the Budget announcements.
Commenting on today’s announcement, Groves says: “Partnership currently has no debt and it is therefore logical to explore the opportunities to diversify, optimise and strengthen our robust capital position with a prudent amount of leverage. We will update the market in due course.”