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18 December 2008

Commission approves recapitalisation of Belgian KBC Group


The Commission approved the emergency recapitalisation package the Belgian authorities intend to grant to KBC Group via a special type of securities worth €3.5 billion.

The Commission approved the emergency recapitalisation package the Belgian authorities intend to grant to KBC Group via a special type of securities worth €3.5 billion.

 

The capital injection will increase the tier 1 ratio of KBC Bank to above 10% and the solvency ratio of KBC Insurance to 280%.

 

The securities to be issued would qualify as core tier 1 capital and produce an annual coupon equal to the higher of:

  • € 2.51 per security, non cumulative, payable annually in arrears
  • 120% of the dividend paid on the ordinary shares in 2009
  • 125% of the dividend paid on the ordinary shares from 2010 onwards.

 

The coupon would only be paid if a dividend is paid on ordinary shares. If KBC decides to buy the securities back, it would have to pay 150% of the issue price. In case KBC requests the conversion of the securities into ordinary shares, the Belgian authorities can require repayment of the securities at a value of between 115% and 150% of the issue price, depending on the timing of such conversion.

 

Press release

 



© European Commission


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