Danaos Corporation Announces $1 Billion in Incremental Contracted Revenues and Sale Proceeds Through New Charter Arrangements for 11 Vessels and the Agreement to Sell 2 Vessels
Danaos Corporation, one of the world’s largest independent owners of containerships, announced that it has entered into new charter arrangements for 11 of its vessels ranging between 2,500 to 10,000 TEU with major liner companies, that significantly improve cash flow visibility and charter coverage. These charters, which have a revenue weighted average contract duration of 4.7 years commence on the expiration of the vessels’ existing charters between February 2022 and April 2023 and extend up to May 2028.
The new charters increase the Company’s contracted revenue backlog by approximately $870 million, or by approximately $700 million in contracted EBITDA. Inclusive of these charters, total contracted operating revenue was $2.8 billion as of December 31, 2021, with a remaining average contracted charter duration of four years, weighted by aggregate contracted charter revenue. Additionally, contract coverage in terms of operating days is now 95% for 2022, 77% for 2023 and 57% for 2024.
The Company has also entered into an agreement to sell two 20-year-old 6,422 TEU vessels for a total consideration of $130 million and are expected to be delivered to their buyer in November 2022. The Company acquired these two vessels as part of the consolidation of Gemini Shipholdings Corporation on July 1, 2021, based on a fair value of $73 million, and expects to book a healthy profit when the sale is completed.
The Company’s CEO, Dr. John Coustas commented:
“We are very pleased to announce the continued improvement of our contracted backlog with multi-year charters for 11 of our vessels and the profitable sale of two older vessels. The combined result is up to $1 billion of contracted revenue accretion and sales proceeds. These transactions significantly improve our liquidity and cash flow visibility for the next several years and further strengthen our balance sheet. We will continue to work to maximize our profitability and secure more accretive transactions with a focus on creating value for our shareholders.”
Legal & General & Mitsubishi sell Central Saint Giles to Google for $1 billion
Legal & General Investment Management Real Assets (LGIMRA) has announced, on behalf of Central Saint Giles Limited Partnership, its 50:50 joint venture with Mitsubishi Estate London Limited, that it has sold the iconic Central Saint Giles office development in London’s West End to Google for $1 billion.
The sale represents a strong exit from the joint venture vehicle for both investors after developing and owning the asset for more than 10 years.
Central Saint Giles is one of London’s more colourful mixed-use developments and one of the largest in the West End. The development, architect Renzo Piano’s first UK project, is formed of three buildings surrounding a central, public piazza.
The architecturally striking building comprises 408,000 sq ft of office space with 25,000 sq ft of restaurants and cafes at ground floor level. The building is highly sustainable, benefiting from an in-use BREEAM Excellent rating. At the western end of the site, two residential buildings contain a mix of 109 private, affordable and social apartments. The long leasehold interests of the residential buildings continue to be owned and managed by the existing owners.
The buildings have become a landmark in central London with their elevations broken down into 21 different facades in orange, green, red, yellow and grey glazed ceramic tiles. They occupy a pivotal position linking Bloomsbury, Covent Garden, Soho and Fitzrovia and were a focal point for the regeneration of the St Giles area.
Situated adjacent to Tottenham Court Road underground station where the Central line and Northern line intersect, the location offers easy access to the West End, Midtown and City business districts, and also further afield to Berkshire, Essex and South East London once the Elizabeth Line opens.
The investors in the joint venture are Mitsubishi Estate London and the L&G Managed and ReAssure funds. The sale is in line with LGIM’s business plan for the asset and concludes a highly successful partnership.
Bill Hughes, Head of Real Assets for LGIM: “The sale is a strong sign of continued demand for the highest quality central London office space. It represents an excellent outcome for our investors, derived from consistently high-quality asset management by our team over the past decade, to deliver on the business plan for Central Saint Giles. We are pleased to have concluded the deal off-market with Google, which knows the asset well and saw the potential to invest longer-term in an exceptional building.”
Yuichiro Shioda, Managing Director and CEO of Mitsubishi Estate London: “Mitsubishi Estate London has been involved with Central Saint Giles since the development phase, and this sale is the culmination of one of our flagship projects. Its acquisition by Google, a company renowned for occupying only the very best buildings, is a fitting legacy for one of the West End’s most successful and recognisable developments. We remain committed to London offices, through new opportunities as well as existing schemes.”
Zurich to sell its Italian life and pensions back book to GamaLife
Transaction to release approximately USD 1.2 billion of capital and add 11 percentage points to the Group’s Swiss Solvency Test ratio1
Significant reduction in the Group’s exposure to credit risk
Zurich will focus on protection and unit-linked solutions in the Italian life insurance and pension market
First step in a series planned to significantly improve capital allocation across the Group
Zurich Insurance Group (Zurich) announced that its subsidiary Zurich Investments Life S.p.A. has agreed to sell its life and pension back book, composed of both traditional and unit-linked policies, to the Portuguese insurance company GamaLife – Companhia de Seguros de Vida, S.A. (GamaLife).
“The sale demonstrates our commitment to improve capital utilization across our life back book. The transaction also reduces our exposure to interest rates and credit risks and allows us to focus on the parts of the Italian life and pensions market where we can best serve our customers. We are confident that GamaLife will continue to provide our customers with the same high quality of service that they expect,” said Group Chief Financial Officer George Quinn. “The Italian life insurance and pension market is important for us and the recent acquisition of Deutsche Bank’s Italian financial advisor network provides a strong platform for further growth in our preferred products.”
The transaction does not change contractual obligations toward policyholders and distributors. Zurich will continue to offer innovative protection and unit-linked solutions to customers in Italy.
“Together with Zurich, we believe this transaction represents strong strategic alignment between GamaLife’s focus on sustainable growth and Zurich’s intention to exit legacy business in Italy,” said Matteo Castelvetri, Chief Executive Officer of GamaLife Group. “We look forward to welcoming Zurich’s customers. Our focus will be to ensure a seamless transition for all local stakeholders and to bring our values of innovation, simplicity and service across the enlarged GamaLife group.”
The transaction will see approximately USD 9.5 billion of net reserves2 transferred to GamaLife. On completion of the transaction, Zurich’s capital requirement under the Swiss Solvency Test is expected to decrease by approximately USD 1.2 billion, adding approximately 11 percentage points to the Swiss Solvency Test ratio1. In addition, the transaction is expected to increase the Group’s liquidity by approximately USD 200 million3.
The completion of the transaction is anticipated to take place in the second half of this year, subject to regulatory approvals.
1 Completion of the transaction would result in an estimated Swiss Solvency Test (SST) ratio of 214%, on a pro forma basis based on our estimate of 203% as of September 30, 2021, and according to the Group’s internal model approved by the Swiss Financial Market Supervisory Authority FINMA.2 In accordance with International Financial Reporting Standards (IFRS) and on a pro forma basis as per June 30, 2021.3 This includes the expected cash consideration of EUR 128 million (approximately USD 148 million, as per September 30, 2021, exchange rates).
Swiss Re agrees to sell elipsLife to Swiss Life International and to enter into a long-term partnership supported by reinsurance
Swiss Re announced that it has agreed to sell its life insurance subsidiary Elips Life AG (“elipsLife“) to Swiss Life International and to enter into a long-term reinsurance partnership for elipsLife’s in-force and new business.
Andreas Berger, Chief Executive Officer Swiss Re Corporate Solutions, said: “We are very pleased to have found the perfect partner in Swiss Life to take elipsLife into a successful future. The sale will allow Corporate Solutions to focus on continuing the strong performance of our core commercial insurance business. At the same time Swiss Re will keep exposure to an attractive risk pool via a long-term reinsurance partnership with Swiss Life.“
Nils Frowein, CEO Swiss Life International, said: “The partnership will significantly strengthen our Employee Benefits offering in Europe and will contribute to our risk and fee result which is fully aligned with Swiss Life’s strategy.“
elipsLife is an insurance company for institutional clients such as pension funds, collective foundations, companies, and associations. The company focuses on insurance products that cover the financial consequences of illness and accidents. At the forefront of its activities are occupational and private pension provision for death and disability risks. elipsLife’s headquarters are located in Vaduz, Liechtenstein. elipsLife has been a wholly owned subsidiary of Swiss Re since October 2011, and since 2020 it has been part of the Business Unit Corporate Solutions.
As part of the agreement, Swiss Life will take over elipsLife, excluding the medical business of Elips Versicherungen AG in Ireland, which will remain with Swiss Re. The transaction is expected to close in the first half of 2022, subject to several closing conditions, including regulatory approval and merger control clearance by the applicable authorities.
Prudential Financial to sell $31B PALAC block of legacy variable annuities to Fortitude Re
De-risking transaction for 17% of Prudential’s annuity block advances transformation strategy by reducing exposure to traditional variable annuities with guaranteed living benefits and capital markets sensitivity
Affirms Prudential’s commitment to the individual retirement market and organic growth of protected outcome solutions, including FlexGuard
Underscores Fortitude Re’s leadership in providing comprehensive solutions for a broad array of long-dated insurance liabilities
Prudential Financial, Inc. (“Prudential”) and Fortitude Group Holdings, LLC, the parent company of Bermuda’s largest multi-line reinsurer (“Fortitude Re”), announced that they have entered into a definitive agreement under which Prudential will sell a portion of its in-force legacy variable annuity block to Fortitude Re for a total transaction value of $2.2 billion.1
Under the terms of the agreement, Prudential will sell one of its stand-alone legal entity subsidiaries, Prudential Annuities Life Assurance Corporation (PALAC), including PALAC’s in-force annuity contracts, to Fortitude Re, for an all-cash purchase price of $1.5 billion, subject to certain adjustments at closing, plus a capital release to Prudential and an expected tax benefit.
The PALAC block primarily consists of non-New York traditional variable annuities with guaranteed living benefits that were issued prior to 2011, which constitute approximately $31 billion or 17% of Prudential’s total in-force individual annuity account values as of June 30, 2021. PALAC complements Fortitude Re’s market-leading capabilities in designing tailored solutions for leading insurers that enhance capital efficiency and address strategic priorities.
Prudential will continue to service and administer all contracts in the PALAC block following the transaction to ensure a consistent experience for customers. Prudential does not expect there to be any direct impact to employee head count as a result of the transaction.
“We are pleased to have reached an agreement with Fortitude Re, which represents another significant milestone in Prudential’s journey to becoming a higher growth, less market sensitive, more nimble company,” said Prudential Chairman and CEO Charles Lowrey. “This transaction underscores how a partnership with the right expertise and financial strength can benefit our customers and investors, while also unlocking new opportunities for our businesses.”
“This transaction is an important step forward for Fortitude Re and demonstrates our expertise in delivering comprehensive and value enhancing solutions for our clients,” said Fortitude Re Chief Executive Officer James Bracken. “Our strong, diversified balance sheet, proven risk management capabilities, and access to Carlyle’s asset origination franchise are key differentiators that enable us to responsibly manage complex, long-dated insurance liabilities. I am excited about the partnership with Prudential and the strategic opportunities this acquisition creates.”
Prudential will retain its interest in all FlexGuard buffered annuity contracts and PALAC recently issued fixed and fixed indexed annuities through a reinsurance agreement with Fortitude Re and, subject to regulatory approvals, intends to offer those FlexGuard and other recent PALAC customers the option to replace the issuer of their contract with another Prudential subsidiary, with further details to be provided to applicable customers. Prudential will continue to sell new FlexGuard and other protected outcome solutions through additional existing subsidiaries.
“Prudential’s individual Annuities business in the U.S. remains an important component of our business mix and organic growth strategy,” said Prudential Executive Vice President and Head of U.S. Businesses Andy Sullivan. “Going forward, we will be better positioned to deliver new investment strategies like FlexGuard, which continues to achieve record success, and focus on creating the next generation of protected income solutions to help more Americans secure their financial future.”
The transaction, which is subject to regulatory approval and other customary closing conditions, is expected to close during the first half of 2022.
Upon closing, Prudential anticipates a reduction to pre-tax annual adjusted operating income of approximately $290 million. Proceeds from the transaction are expected to be used for general corporate purposes.
Debevoise & Plimpton LLP served as legal counsel to Fortitude Re. Sidley Austin LLP served as legal counsel to Prudential, and Goldman Sachs & Co. LLC served as exclusive financial advisor.
[1] Total transaction value includes the purchase price for PALAC plus a capital release to Prudential and an expected tax benefit.
Argo Group to Sell Contract Binding P&C Renewal Rights to Mesa Underwriters Specialty Insurance Company
Argo Group International Holdings Ltd. (NYSE: ARGO), an underwriter of specialty insurance, announced an agreement to sell the renewal rights of its contract binding property and casualty business to Mesa Underwriters Specialty Insurance Company (MUSIC), the excess and surplus lines subsidiary of Selective Insurance Group Inc. (NASDAQ: SIGI).
“This transaction supports the company’s strategy to simplify the business,” said Marsh Duncan, Argo Group, president, excess and surplus. “We are pleased to have reached an agreement that provides a smooth transition for our brokers and insureds.”
As a part of the transaction, the Argo contract binding team will have the option to join MUSIC and continue to serve this market. Argo Group will continue to honor and service all policies currently in force.
“Expanding our contract binding book of business is a natural evolution of our growth strategy, further ensuring MUSIC’s continued success,” said Jeff Kamrowski, executive vice president, MUSIC. “We are dedicated to our specialty insurance customers and are excited for the opportunity to offer our customized insurance solutions, stellar customer service, and superior claims handling to new contract binding accounts at renewal. This opportunity and trust that Argo places in MUSIC underscores our strong reputation and solid performance in the marketplace.”
The terms of this transaction were not disclosed.
ABN AMRO to sell portfolio of energy loans
ABN AMRO has agreed to sell a portfolio of energy loans to funds managed by Oaktree Capital Management, L.P. (“Oaktree”) and affiliates of Sixth Street Partners (“Sixth Street”). Oaktree and Sixth Street are jointly acquiring the portfolio, which consists of loans to approximately 75 companies active in the North American energy markets. The total volume of the portfolio is around 1.5 billion US dollars (as at 31 March 2021).
As a result of the sale, ABN AMRO withdraws from oil and gas related lending in North America. Oaktree and Sixth Street together will assume all current commitments, following client consent, of around 3 billion US dollars (total committed and uncommitted loans as at 31 March 2021).
The sale further accelerates the wind-down of ABN AMRO’s non-core activities, as announced in August 2020, significantly reducing the non-core loan book.
On aggregate, the loans will be sold at a discount to book value of approximately 135 million euros while reducing RWAs by around 2 billion euros, resulting in a net positive impact on capital ratios in Q2 2021.
Allstate to Sell Life Insurance Company to Blackstone for $2.8M to Grow in P/C
The Allstate Corporation (NYSE: ALL) has agreed to sell Allstate Life Insurance Company (ALIC) to entities managed by Blackstone for $2.8 billion. ALIC holds approximately 80% (or $23 billion) of Allstate’s life and annuity reserves and generated net income of $467 million in 2019 and a net loss of $23 million in the first nine months of 2020. The transaction is subject to regulatory approval with an expected closing in the second half of 2021.
“Allstate is deploying capital out of lower growth and return businesses while continuing to execute our strategy to grow market share in personal property-liability and expand protection solutions for customers,” said Tom Wilson, Chair, President and CEO. “Customers will be protected using non-proprietary life insurance products, as is currently done for annuities. Deployable capital will increase, and the transaction also provides increased transparency to the industry-leading returns of our core protection businesses,” concluded Wilson.
Gilles Dellaert, Global Head of Blackstone Insurance Solutions, said, “We’re pleased to enter into this transaction as Blackstone continues growing its insurance business. We believe our team’s extensive experience in the insurance sector and world-class asset origination capabilities will deliver significant benefits to policyholders and investors over the long term.”
Transaction details
Allstate will sell ALIC and certain subsidiaries, excluding Allstate Life Insurance Company of New York (ALNY), to entities managed by Blackstone for $2.8 billion, including a pre-closing dividend from ALIC of up to $400 million. All statutory earnings from March 31, 2020, to closing, will be retained by Allstate. The transaction will reduce Allstate’s GAAP reserves by $23 billion. Blackstone will enter into an asset management agreement for ALIC’s $28 billion of investments.
Allstate will retain ownership of ALNY, which has $5 billion of GAAP reserves and is pursuing alternatives to sell or otherwise transfer risk to a third party.
“Allstate has been surgically deploying capital out of spread-based products with life and annuity liabilities declining to $5 billion after the closing of this transaction,” said Mario Rizzo, Allstate Chief Financial Officer. “The investment portfolio will decline by approximately $28 billion to $63 billion. A financial book loss of approximately $3.1 billion will be recorded in the first quarter of 2021 given the lower returns on equity for the annuity businesses. Adjusted Net Income Return on Equity will increase by approximately 1 percentage point,” concluded Rizzo.
Menes Chee, a Senior Managing Director at Blackstone, said, “We’re excited to have raised long-term capital to invest in the business. Allstate’s team has created a strong book of business and we look forward to helping continue to provide exceptional service to policyholders moving forward.”
J.P. Morgan Securities LLC, Ardea Partners LP and Lazard acted as financial advisers and Willkie Farr & Gallagher LLP was the legal adviser to Allstate. Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC acted as financial advisers and Debevoise & Plimpton LLP was legal adviser to Blackstone.
Argo Group Agrees to Sell Its Italian Business
Argo Group International Holdings Ltd., a Bermuda-based underwriter of specialty insurance products, announced an agreement to sell its Italian operations, ArgoGlobal Assicurazioni S.p.A (AGA) to Perfuturo Capital AG, a Swiss holding company.
Perfuturo is fully owned by Philantra Holding AG – a green, technology and renewable energy specialist.
Closing of the transaction is subject to regulatory approval and is expected to occur in early 2021. Financial details of the transaction were not disclosed.
“We are confident that Perfuturo’s expertise and knowledge of the European market will allow AGA to thrive,” said Matt Harris, Argo Group head of international operations. “This transaction aligns with our strategy to simplify the business and streamline operations.
“Argo Group will continue to focus on specialty insurance lines of business that we expect will result in profitable growth and improved shareholder value,” Harris said.
“Perfuturo is excited to be investing in AGA and bringing on board talented professionals with unparalleled insurance market expertise and knowledge of the Italian market,” said Perfuturo’s Chief Executive Officer Stephan Kochem. “With the financial strength and European experience of our group, we will pursue our ambition of building a world-class insurance business in Italy.”
National Bank of Greece agrees to sell a Romanian-risk non-performing loan portfolio (Project Danube) to Bain Capital Credit
National Bank of Greece (“NBG”) announces that it has entered into a definite agreement with Bain Capital Credit (“Bain Capital”) for the disposal of a Romanian-risk corporate NPE portfolio (“Project Danube”) with a total Gross Book Value of c. €174 million (€102 million of allocated collateral value). The transaction is being implemented in the context of NBG’s NPE deleveraging strategy and in accordance with the Operational Targets submitted to the Single Supervisory Mechanism (“SSM”).
The transaction has a neutral capital impact to the Bank.
Deloitte Business Solutions SA acted as financial advisor to NBG, Milbank LLP and CMS Cameron McKenna Nabarro Olswang LLP SCP as international and local external legal counsels.The closing of the transaction is subject to standard conditions precedent, including the approval of the transaction by the Competition Council of Romania, as well as the consent of the Hellenic Financial Stability Fund.