AEGON releases €315million in securitisation transaction
21 July 2008

Written by Sophie Baker

AEGON has completed a €315million securitisation transaction to improve capital efficiency and optimise their capital structure as part of the group’s new strategy.

The transaction adds the equivalent of around £250million of core capital, enhancing the financial flexibility of the group and improving the return on capital deployed in the UK. The move forms part of AEGON’s three strategic priorities, designed to support its growth ambitions, to allocate capital toward businesses with higher growth and return prospects, to improve growth and returns in existing businesses, and to manage AEGON as an international group.

CEO and chairman of the executive board, Alexander Wynaendts, said: “Innovative transactions such as this enable us to manage capital more effectively across the AEGON Group, representing one of our key strategic objectives. The fact that we’ve completed this transaction in the current financial environment reflects confidence in AEGON’s continued financial strength.”

The transaction, which was private and structured by Barclays Capital, was rated by Fitch as single A and is a value in-force securitisation which enables AEGON to monetise the value of a portion of future profits from a book of unit-linked business within its UK operations. Each year for the first three years, AEGON also has the option to contribute new business to maintain the level of financing outstanding. The group said it will continue to further explore opportunities to improve its capital efficiency, optimise its capital allocation and improve returns.