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The issuance is part of a process to restructure the Company's liabilities to lengthen their duration.
Today Grupo Security concluded the placement of a new bond on the local market for UF 1.5 million, which attracted significant market interest and total demand of UF 2.7 million, or 1.8 times the offering size. This 25-year bond (N1 series) with a 20-year grace period and a duration of 16.5 years, was placed at a rate of UF + 3.05%.
The issuance is part of a liability restructuring plan that Grupo Security began in 2017 in order to lengthen the duration of its liabilities, which rose from 11.3 years in late 2016 to the current figure of 12.78 years. This restructuring plan also included a bond exchange in January 2017, by which UF1,189,000 in F bonds (originally UF 1,250,000) were exchanged for M bonds, leaving a balance of UF61,000 in F bonds; and an issuance of long-term debt in December 2017 to replace bank loans in its intermediate holding, Inversiones Previsión Security. These 21-year bonds have a grace period of 10 years and raised UF 1,000,000.
Grupo Security is a diversified financial group with 13 companies structured into four main business areas. Each area includes the subsidiaries and divisions that share common business objectives. These four areas are: lending, insurance, asset management and other services. For the year 2017, Grupo Security reported profit of CH$74,708 million, which represents an increase of 0.2% over 2016. EBITDA in 2017 totaled CH$121,856 million, up 0.9% over 2016, while return on equity reached 11.58%.
In August 2017, it completed a successful capital increase of CH$93,424 million in order to sustain above-industry growth rates in its diverse businesses and strengthen the capital base of its main assets: banking and insurance. This capital event confirms its shareholders’ trust and backing.