Insurer urged to cut out bankers to pay off debt with equity
RSA is considering a rights issue in the next two weeks of up to $1bn (£614m) and has appointed JP Morgan and Merrill Lynch the Telegraph reports.
The plans come after RSA announced that it intended to repay two tranches of corporate debt with a total value of €500m [£439m].
The Times called on RSA to underwrite its own rights issue after other insurers criticised the high cost charged by investment banks and are trying to find a away of avoiding using them.
“Many of Mr Haste’s peers have been making a fuss about the size of fees charged by investment banks for underwriting conventional rights issues. M&G, the Prudential’s investment unit, Aviva Investors, Legal & General and Standard Life have hired Lazard and Rothschild — two investment banking advisers which do not do any underwriting themselves — to come up with a radical plan to bypass the investment banks,” the Times said
“As one of the UK’s biggest institutional investors, RSA would be the perfect candidate to pioneer the new capital-raising method”
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