Phoenix Group hits cash target after Axa acquisition

Insurance provider Phoenix Group Holdings has achieved its 2016 target for cash regeneration and will make at least £250m from the acquisition of the Axa businesses.

The company generated £486m from its operating companies last year, achieving its target, and of this, £117m came from the integration of the Axa Wealth pensions and protection business it bought in November 2016.

Phoenix expectation to make at least £250m from the integration of the AXA businesses within six months of completion of the acquisition.

In December 2016, the company repaid £182m of bank debt used to finance the acquisition of the AXA businesses and the £250m short-term bank facility for acquisition of the Abbey Life business was converted into a tranche of the its existing bank revolving credit facility. This increasing the size of the facility to £900m from £650m.

Some £50m of the facility was also repaid, leaving £850m outstanding as at the end of December 2016.

The FTSE 250 company also announced that on 21 December 2016, PGH Capital established a £3bn euro medium term note programme guaranteed on a senior or subordinated basis by Phoenix, and a consortium of banks has arranged a series of credit investor meetings in London starting on Thursday.

A benchmark sterling denominated 5.5 year tier three transaction to be guaranteed on a subordinated basis will follow, subject to market conditions and the proceeds from the proposed debt issuance are expected to be used to reduce its bank debt.