Resolution Limited RSL Update re Friends Life Group plc Notes

  Resolution Limited (RSL) - Update re Friends Life Group plc Notes

RNS Number : 6763Q
Resolution Limited
08 November 2012

                                                               8 November 2012

                              RESOLUTION LIMITED

    Friends Life Group plc issuance of Reset Perpetual Subordinated Notes

Resolution Limited  ("Resolution"  or  the  "Company")  announces  that  on  8 
November 2012  its  subsidiary,  Friends  Life  Group  plc  ("Friends  Life"), 
completed an issuance of  US$ 575 million  Reset Perpetual Subordinated  Notes 
(the "Notes") with a coupon of 7.875%, guaranteed by its principal subsidiary,
Friends Life Limited.

Friends Life will utilise £200 million of the net proceeds from this  issuance 
to redeem in full the internal  Tier 2 instrument owed to Resolution.  Friends 
Life will also  transfer a  further £150  million to  Resolution by  way of  a 
dividend. The  Company  intends  to  apply  these  proceeds,  supplemented  by 
additional cash resources already held at Resolution, to make early  repayment 
in full on 20 November 2012 of the outstanding principal and accrued  interest 
on the Deferred  Consideration Notes  ("DCNs"). The  DCNs were  issued by  the 
Company in connection with the acquisition  of the AXA UK Life Business,  bear 
an interest rate of  6.5% pa, and  would otherwise have  been due to  amortise 
over the  next 6  years. Following  the  repayment of  the DCNs,  the  group's 
external cash commitments  will reduce by  approximately £60m per  annum as  a 
result of the removal of the requirement to amortise the DCN's. However  there 
will be an increase in the net pre-tax interest costs at Friends Life level of
approximately £10 million per annum.

Following this exercise, the Company will no longer hold any debt  instruments 
issued by Friends Life and will have no external debt outstanding. The Company
remains committed to  its ordinary  dividend and this  exercise increases  the 
ordinary dividend cover.

For further information, please contact:

Neil Wesley, Resolution Operations LLP +44 (0)20
3372 2928

Alex Child-Villiers, Temple Bar Advisory +44 (0)
7795 425580

Notes to Editors

The Notes are guaranteed on a  subordinated basis by Friends Life Limited  and 
from the issue  date until  the interest payment  date in  November 2018  (the 
"First  Reset  Date")  will  bear  interest  at  7.875%  per  annum,   payable 
semi-annually in  arrear.  In  respect  of each  successive  six  year  period 
thereafter, the Notes will bear  interest at a rate equal  to the six year  US 
Dollar mid swap  rate plus  a margin.  Subject to  compliance with  applicable 
regulatory requirements, Friends Life  may redeem the Notes  at its option  on 
the First Reset Date or  any interest payment date  thereafter or at any  time 
upon the occurrence of certain tax or regulatory events.

The Company's  ordinary shares  were  admitted to  the  Official List  and  to 
trading on the main market of the London Stock Exchange in December 2008.  The 
Company  transferred  to  a  Premium   Listing  as  it  completed  its   first 
acquisition, Friends Provident Group plc, on 4 November 2009 and is subject to
those provisions of the Listing Rules that apply to overseas companies with  a 
Premium Listing. The Company completed its second acquisition, the majority of
the AXA  UK life  business, on  15 September  2010. On  31 January  2011,  the 
Company completed  its third  acquisition,  the shares  and business  of  Bupa 
Health Assurance Limited.

A copy  of this  announcement is  and will  be available,  subject to  certain 
restrictions relating  to persons  resident in  restricted jurisdictions,  for 
inspection on the Company's website at

For the avoidance of  doubt any other information  contained on the  Company's 
website does not form part of this announcement.


                     This information is provided by RNS
           The company news service from the London Stock Exchange


MSCBXBDBRDGBGDI -0- Nov/08/2012 13:35 GMT
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