Swiss Re sells £437m stake in Phoenix through accelerated bookbuilding

Reinsurer  Swiss Re has reduced its shareholding in  Phoenix Group Holdings by selling approximately 6.6 percent stake for £437 million through an accelerated bookbuilding process.

The Phoenix stake was acquired in the sale of ReAssure in 2020.

The company said that it is selling the stake following a "regular review and rebalancing" of its investment portfolio, and is consistent with the group’s overall investment strategy across equity and alternative investments.

In connection with the sale, Phoenix gave its consent to Swiss Re to conduct this transaction prior to the expiry on July 23 of the lock-up arrangement agreed between the parties. The sale is expected to close on June 25.

Swiss Re estimates that the sale will result in a low single-digit increase in the group’s Swiss Solvency Test ratio. The impact of the transaction on Swiss Re’s US GAAP earnings is not expected to be significant.

The reinsurer has agreed to a lock-up arrangement in respect of its remaining stake of approximately 6.6 percent in Phoenix of 90 days following closing, subject to waiver. The remaining stake will continue to be marked to market in US GAAP earnings.

The move is viewed as credit positive by ratings agency Moody’s Investors Service. Analyst Dominic Simpson explained: “Swiss Re has halved its shareholding in Phoenix Group to 6.6 percent, equivalent to £437 million, which we view as credit positive in that it will reduce Swiss Re’s asset concentration and have a small positive impact on it solvency.”

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.