Lloyd’s insurer pulls new bond after investors were reluctant to sell the old ones

Andrew Horton, Beazley

Lloyd’s insurer Beazley has abandoned plans to replace its existing subordinated bond with a new retail bond after most investors proved reluctant to sell their old bonds.

On 7 February, Beazley offered to buy back the £150m of subordinated bonds it had on issue, which were scheduled to mature in 2026.

However, the insurer was able to buy back only £26.2m-worth, or 17%, of the outstanding bonds. Some £76.5m-worth of bonds were left outstanding, which Beazley said showed “a strong appetite among subordinated debt holders for Beazley’s credit”.

The company said in a statement: “Beazley had considered the possibility of replacing all of its subordinated debt with retail bond debt, and had discussions with potential distributors that suggested strong demand for a further retail bond issuance by Beazley. However, given the majority of subordinated bondholders’ wish to retain their holdings, Beazley continues to have sufficient debt capital and has therefore decided not to pursue a retail bond offer at this point in time.”