Standard Life launches £500m ten-year bond

Standard Life offices in Edinburgh's Lothian Road
Standard Life offices in Edinburgh's Lothian Road
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STANDARD Life has moved to strengthen its balance sheet by launching a bond issue aimed at raising £500 million.

The Edinburgh-based firm said strong market demand and an over-subscribed order book meant it was able to price the subordinated notes “competitively” at a fixed rate of 5.5 per cent for ten years.

Its move came the day after Stobart Group pulled plans to raise £25m through its first retail bond offering. The haulier said it may still tap into the burgeoning retail bond sector but it had shelved its fundraising because a number of larger players had come to market recently. Unite, the student accommodation provider, last week unveiled plans to raise up to £75m through its first retail bond, paying a fixed rate of 6.125 per cent. Others to launch bonds in recent months include Tesco Bank and business premises provider Workspace.

Standard Life tapped into Canada’s debt markets with a C$400m (£251m) bond issue in September. It said the proceeds of its latest exercise would be used for “general corporate purposes” and will count towards its Insurance Groups Directive surplus, which stood at £3.4 billion as of 31 October.

Chief financial officer Jackie Hunt said: “Building on the recent issuance of subordinated debentures in Canada, we have taken advantage of favourable market conditions to improve the leverage position of the Standard Life group via a subordinated debt issuance directly from our holding company.

“The strong order book and successful placement is a powerful signal of investors’ confidence in Standard Life’s financial strength and strategic plans.”

The syndicate for its latest offering was co-led by Barclays, Deutsche Bank, Merrill Lynch, Royal Bank of Scotland and UBS Investment Bank.

The offering is expected to close on 4 December.