AXA announces the successful placement of Euro 1.5 billion Restricted Tier 1 Notes

AXA today announced the successful placement of Euro 1.5 billion of Reg S perpetual deeply subordinated notes (the Notes) with institutional investors. The Notes qualify as Restricted Tier 1 capital under Solvency II. Investor demand for the issuance was strong with a book subscribed more than 5 times.

The initial fixed rate has been set at 6.375% per annum until the end of a 6-month call window period (ending on January 16, 2034), when the interest rate will reset and every five years thereafter at the prevailing Euro 5-year Mid Swap rate plus a margin of 384.1 basis points. In line with the Solvency II requirements, the Notes feature a loss absorption mechanism in the form of a write-down* of the nominal amount of the Notes in the event that one of the solvency-related triggers** is breached***. Interest payments are at the full discretion of AXA unless they are mandatorily prohibited.

The Notes are expected to be rated BBB+ by Standard & Poor’s and Baa1(hyb) by Moody’s. They will be treated as capital from a regulatory and rating agencies’ perspective within applicable limits.

This issuance is part of AXA Group’s funding plan for 2024 and the proceeds will be used for general corporate purposes, including the refinancing of part of the AXA Group’s outstanding debt.

The settlement of the Notes is expected to take place on January 16, 2024.

* With discretionary reinstatement subject to conditions as further described in the Prospectus dated January 10, 2024

** As determined under Solvency II

*** Either at AXA Group level or at AXA SA solo level. AXA SA expects to transition the calculation of its Solo Solvency II ratio from the Solvency II standard formula to the AXA Group’s Internal Model by the end of 2024, subject to prior approval by the ACPR. At AXA SA level, the impact of such transition is expected to result in a reduction in the AXA SA Solo Solvency II ratio to a level more consistent with AXA Group’s Solvency II ratio. At Group level, such transition is expected to have an immaterial impact on the AXA Group’s Solvency II ratio and a limited negative impact on the AXA Group’s MCR coverage. The AXA SA MCR coverage is expected to remain materially above the AXA Group MCR coverage.