Challenger Life Company Limited – Subordinated Notes

Established in 1985, Challenger Life Company, a wholly owned subsidiary of Challenger Limited (CGF.ASX) is an APRA-regulated life insurance company and the leading provider of annuities in Australia with over $110 billion in assets. They offer a range of flexible products aimed at helping customers during retirement. Their array of products provides regular payments over a fixed term or for life with protection from key risks such as inflation and outliving savings. Challenger has been recognised as a retirement income product innovator and has won the Association of Financial Advisers ‘Annuity Provider of the Year’ for the last 14 years.

Challenger Life’s latest results reported a 13.7% increase in funds under management to $22.4 billion leading to an increase of 18.2% in normalised EBIT to $472 million, driven by strong sales and FUM growth. The strong earnings growth comes after an expansion in their life product offering and distribution channels, to meet more customer needs.

Challenger Life have mandated Barrenjoey, Jarden, NAB and Westpac to host a series of fixed income investor meeting around the issuance of a potential 15-year, 5-year non-callable subordinate note. Investor calls held on Monday the 5th of September have indicated the issuance is likely to be priced at a margin above BBSW of 3.75% for the floating rate note and/or a fixed rate coupon of around 7.53%. The expected issue size is AUD400 million aligning with the Challenger Life subordinated notes due for repayment on the 24-Nov-2022. Challenger Life Company is rated A by Standard & Poor’s, with a Stable outlook and the new subordinated note issuance is expected to be rated BBB (S&P).