ICICI Lombard announces private placement of subordinated debt

Raises Rs 485 cr via 10-year NCDs, at an interest rate of 8.25%

ICICI Lombard General Insurance has announced the successful private placement of 4,850 unsecured, subordinated, fully paid-up, listed, redeemable, non-convertible debentures having face value of Rs 10,00,000 each (the NCDs), at par, aggregating to Rs 485 crore. This is at an interest rate of 8.25 per cent per annum and a maturity period of 10 years. This is the first issuance of subordinated debt by an insurance company in India.

Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance said, "We are excited to be the first insurance company to have augmented our capital base by issuing subordinated debt, post the recent measures announced by the Insurance Regulatory and Development Authority of India (IRDAI), allowing alternative forms of capital.  The successful closure of the issue is a testimony to shareholder confidence in the franchise."

ICICI Lombard in a statement said that to further strengthen the companys efforts, it had decided to raise capital through the issuance of NCDs. The funds raised through this issue would be used for further strengthening the Companys solvency by way of augmenting its capital under Other Forms of Capital and thereby facilitate business growth.

The NCDs have been assigned the highest credit rating AAA (Outlook: Stable) by rating agencies CRISIL and ICRA.

The NCDs will be listed on BSE Limited and National Stock Exchange of India Limited.

The issuance of these NCDs are in accordance with the provisions of inter alia the Insurance Regulatory and Development Authority of India (Other Forms of Capital) Regulations, 2015, as amended from time to time, which were notified in November 2015 whereby Indian insurers were allowed to raise additional capital through subordinated debt or preference shares.