LEGAL & GENERAL: ANNUITY BOND PORTFOLIO

RNS Number : 4447O

Legal & General Group Plc

09 February 2016

 

LEGAL & GENERAL: ANNUITY BOND PORTFOLIO

Following a number of enquiries from sell side analysts and investors, Legal & General Group plc ("Legal & General") is providing a provisional, unaudited analysis of our annuity bond portfolio as at 31 December 2015. Final audited analysis will be provided with the 2015 Preliminary Results on 15 March 2016.

As at 31 December 2015, we held a bond portfolio backing our annuity business of c.£39 billion (unaudited) (2014: £40.7bn).  The asset portfolio is diversified by industry sector, geography and issuer.  Details of our ratings and sector diversification split of that portfolio are shown in the tables below.

Legal & General Retirement ("LGR") annuity bond portfolio analysed by credit rating (unaudited):

At 31 December 2015	Externally rated bonds	Internally rated bonds, direct investments and CDOs	Total LGR bond portfolio
AAA	4.4%	-	4.4%
AA	24.0%	4.0%	28.0%
A	28.5%	4.9%	33.4%
BBB	27.3%	3.7%	31.0%
BB or below	2.6%	0.6%	3.2%
	86.8%	13.2%	100.0%

The internally rated bonds, direct investments and CDOs were included as 'Unrated' or 'Other' in prior reporting periods. 

LGR annuity bond portfolio analysed by sector (unaudited):

	31 Dec 2015
Sovereigns, Supras, Sub-Sovereigns	15.3%
Banks	4.3%
Financial Services	1.9%
Insurance	1.7%
Utilities	11.5%
Consumer Services and Goods & Healthcare	11.6%
Technology & Telecoms	6.7%
Industrials & Oil and Gas	9.9%
Of which  - Oil & Gas                                 5.2%
- Basic Resources                     1.2%
- Other Industrials                      3.5%
Property	4.8%
Securitisations & Debentures	28.6%
Asset backed securities	1.0%
CDOs	2.7%
	100.0%

Securitisations & debentures are collateralised credit exposures primarily comprised of Whole Business Securitisations, Housing Associations, Transport and Other Infrastructure bonds. Within the Securitisations & Debentures £65m is in Oil & Gas and £nil in Basic Resources.

Of our LGR annuity bond portfolio 0.7% (£266m) is in sub-investment grade Oil & Gas and 0.1% (£38m) in sub-investment grade Basic Resources.  

We will report our Solvency II capital position for the first time as part of our Preliminary Results on 15 March 2016.

- ENDS -

For further information, please contact:

Investors:

Laura Doyle                       Head of Investor Relations                                                                                       020 3124 2088

Stephen Thomas               Investor Relations Manager                                                                                    020 3124 2047

Media:

John Godfrey                     Corporate Affairs Director                                                                                         020 3124 2090

Richard King                      Head of Group Corporate Communications                                                        020 3124 2095

Notes to editors:

Legal & General Group Plc

Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £12.6bn (as at 5 February 2016) and is responsible for investing £728bn worldwide (as at 30^th September 2015) on behalf of investors, policyholders and shareholders. We have over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2014, Legal & General's operating profit (on the IFRS basis) was £1,275m and earnings per share were 16.70p for the period, an increase of 10% for both respectively.

For more information on Legal & General, please see http://www.legalandgeneralgroup.com/

Forward-looking statements

This announcement may contain certain forward-looking statements relating to Legal & General, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature, forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make.

 

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