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Old Mutual successfully raises R2bn from Capital Markets

17 November 2020 Old Mutual

A resilient and strong business as well as a sound strategy are some of the key reasons investors continue to support Old Mutual. The Pan-African financial services Group concluded a successful bond issuance last week, raising R2-billion and attracting new investors in the process.

Backed by the JSE, Old Mutual has a R25-billion Multi-Issuer Note Programme currently in place. The Group has already allowed for around R2.25-billion in redemptions this year to date and has a further R4.75 billion and R500-million in issue from Old Mutual Limited and Old Mutual Insure respectively.

With its latest bond issuance, the Group initially planned on issuing R1.5-billion in bonds. However, a hugely positive response from investors saw the Group issue a further R500-million on the day, within pricing guidance. With this outcome, the Group has effectively secured listed debt financing at highly favourable rates despite the extremely difficult prevailing market conditions.

According to CEO Iain Williamson, the Group is delighted with the outcome of the bond issuance. “Staying true to the essence of our business built over 175-years, Old Mutual continues to work tirelessly to deliver real value to investors with a sense of assuredness and calm, especially in the face of adverse market conditions.”

While the Group’s performance has been negatively impacted by a difficult macro environment and significant market volatility as a result of the ongoing Covid-19 pandemic, its embedded value remains robust and it continues to maintain very strong liquidity and solvency positions.

Williamson highlighted that Group’s swift progress against its strategic priorities, designed to further strengthen its position. These include:
• The implementation of a range of significant digital improvements for customers and employees undertaken in record time during the lockdown
• The continued provision of market-leading solutions such as the launch of a comprehensive, bespoke Personal Risk offer that enables clients to truly tailor the cover according to their needs
• Ongoing comprehensive Covid-19 relief initiatives across the continent. This includes premium free life cover to qualifying healthcare workers in Kenya, Malawi, South Africa and Zimbabwe. Significant pledges towards high impact and sustainable initiatives that address educational needs, hygiene awareness, nutritional support and access to personal protective equipment for essential service workers across the continent. Customer and Small Business relief worth over R350 million.

“With a strong foundation and proven resilience in the face of adversity, I believe that Old Mutual is best place to drive a range of investment solutions that instils confidence and delivers value for investors and all stakeholders alike,” concludes Williamson.

 

Quick Polls

QUESTION

How to give affordable and appropriate financial advice to the low income market segment. There is little room on a R50 pm policy for advisers to be remunerated for the time it would it would take to educate & fulfil admin function. What is the solution?

ANSWER

[a] Eliminate non-advice sales / telesales
[b] Implement industry standards for non-advice information
[c] Introduce an insurer-funded pro-bono advice network to low income earners
[d] Reinforce the Policyholder Protection Rules
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