Ageas SA/NV expects to recognize a noncash gain on debt extinguishment, net of unwinding of the associated interest rate swap, of around €306 million in the first quarter.
The gain is associated with a recent tender offer, under which the company's Ageasfinlux SA subsidiary accepted for repurchase about €818.8 million of the floating-rate equity-linked subordinated hybrid, or FRESH, capital securities. The repurchased securities will be exchanged into 2,599,206 underlying shares of the parent company.
The transaction is expected to have a negative impact of 12% on the group's solvency ratio and will generate a €513 million cash-out. The positive effect of the issuance of the Restricted Tier 1 subordinated instrument in December 2019 has already offset the decline in solvency ratio.
The tender and notes offering will improve Ageas' solvency position, increasing net cash position by around €237 million.