AEGON FUNDING COMPANY LLC 5.1% SUB NOTES DUE 15/12/2049 USD25
Updated: Jun 3
AEGON Funding Company LLC is a subsidiary of AEGON N.V., a multinational life insurance, pensions, and asset management company headquartered in the Netherlands. AEGON Funding Company LLC is responsible for the issuance of debt securities to support the financing needs of its parent company.
One such debt security issued by AEGON Funding Company LLC is the 5.1% subordinated notes due on December 15, 2049, with a face value of USD 25. These notes are rated A- by S&P and A2 by Moody's, indicating a relatively low credit risk.
Investors who purchase these subordinated notes will receive a fixed interest rate of 5.1% per annum, payable semi-annually on June 15 and December 15 of each year, until the maturity date of December 15, 2049. The interest payments will be made to the registered holder of the notes, and are subject to withholding tax, depending on the investor's country of residence.
The subordinated nature of these notes means that they rank below other senior debt securities in the event of bankruptcy or liquidation of the issuer. This implies that if the issuer were to become insolvent, investors in these notes would be repaid after all senior debt holders have been satisfied. This feature adds an element of risk to the investment, which is reflected in the higher interest rate offered.
Investors should also consider the call option that AEGON Funding Company LLC holds for these subordinated notes. The issuer has the right to redeem the notes at any time, in whole or in part, at a price of USD 25 per note plus accrued and unpaid interest. This means that if interest rates fall, AEGON Funding Company LLC may choose to call the notes and refinance the debt at a lower interest rate.
Investors who are considering purchasing these subordinated notes should carefully evaluate their risk tolerance and investment objectives. While the higher interest rate may be attractive, the subordinated nature of the notes means that investors would be taking on a higher level of risk compared to senior debt securities. Additionally, the call option held by the issuer means that the notes may not necessarily remain outstanding until their maturity date.
The AEGON Funding Company LLC 5.1% subordinated notes due on December 15, 2049, with a face value of USD 25, are an investment option that offers a relatively high fixed interest rate. However, investors should be aware of the subordinated nature of the notes, which implies a higher level of risk, and the call option held by the issuer, which means that the notes may not necessarily remain outstanding until their maturity date.