Group plc STICS
15 September 2010
For immediate release
Friends Provident Group plc (the "Company")
Amendment to the terms of Step-up Tier one Insurance Capital Securities of
Friends Provident Group plc
The Company and its parent undertaking, Resolution Limited ("Resolution")
yesterday agreed to amend the terms of certain of the publicly-issued
regulatory debt instruments issued by the Company, namely its £209,895,000
6.875 per cent guaranteed Step-up Tier one Insurance Capital Securities and its
£267,837,000 6.292 per cent guaranteed Step-up Tier one Insurance Capital
Securities (the "STICS").
The amendment to the STICS was required as, following Resolution's acquisition
of the Company and the Company's de-listing of its ordinary shares, the
alternative coupon satisfaction mechanism ("ACSM") feature of the STICS no
longer operated as intended.
The ACSM would only apply where coupon payments under the STICS were deferred,
which would only happen in exceptional circumstances. Until the Company was
de-listed, the ACSM would have operated so that deferred coupons were satisfied
by the issue of the Company's shares to a calculation agent, who would sell the
shares in the market and apply the proceeds of sale for the benefit of the
Following a review of the options to allow reinstatement of the ACSM in a
manner which meets the original intention for the instruments, the terms and
conditions of the ACSM in the STICS have been amended to provide that deferred
coupons (if any) are satisfied by the issue of Resolution's listed ordinary
shares rather than the Company's shares to the calculation agent. As with the
Company's shares prior to the amendment of the STICS, the calculation agent
will sell Resolution's shares in the market, with the proceeds of such sale
applied for the benefit of the STICS holders.
Diana Monger, Company Secretary
Tel: 0845 26 83448.
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