a.s.r. does not intend to redeem its 4,265% Restricted Tier 1 notes as result of a proposed tax change
On Friday 29 June, the Dutch Ministry of Finance announced its decision that coupon payments in respect of Contingent Convertible instruments would no longer be tax deductible as from 1 January 2019. A formal legislative proposal is expected to be made later this year.
a.s.r. understands that Restricted Tier 1 (“RT1”) instruments issued by insurance companies, including the ASR Nederland N.V. (a.s.r.) €300M 4.625% RT1 notes (ISIN XS1700709683), are expected to fall within scope of the proposed change in tax treatment.
The Ministry of Finance decision does not change a.s.r.’s view that the outstanding 4.625% RT1 notes are an important and efficient component of the company’s capital structure; in terms of economic impact, the incremental cost is estimated to be less than 1% of net profit after hybrid costs. Accordingly, a.s.r. has no intention to execute an early redemption of the 4.625% RT1 notes as a result of the announced change in tax treatment.