Investors chasing yield in an environment of low interest rates have greeted AMP Life with high demand for a $300 million bond raising this week.
According to a report in The Australian, AMP Life has received orders worth $1 billion.
Per the report, prospective investors are being offered the bonds at 3.3 per cent over the bank bill swap rate for the 15-year bond that comes with a five-year non-call period. It is believed the company is raising the funds for regulatory capital purposes.
AMP earlier this year sold its life insurance business for $3 billion to UK-based Resolution Life Group. The sale represented an exit from the life insurance business for AMP after 170 years. AMP Limited has however kept a 20 per cent ownership of the AMP Life business in its revised sale agreement with Resolution and will continue to provide brand and technical assets and support.
AMP had been keen to quit the sector in recent years and focus its future primarily on wealth management, banking and investment management after a roller-coaster few years.
The purchase of AMP Life marked Resolution Life’s entry into the Australian and New Zealand market and provides a solid foundation for growth in Australia and New Zealand according to the company.