10 October 2004 LAWFUEL – Law, attorney, banking, law firm newsJPMorgan has acted as mandated lead arranger, bookrunner and agent for a tranche of debt financing used by Resolution Life Limited to finance its £850m acquisition of the closed life insurance business of Royal & SunAlliance, which was completed on 30 September 2004. International law firm Freshfields Bruckhaus Deringer advised JPMorgan on the transaction.
Brian Gray, the Freshfields partner leading the team that advised JPMorgan, said, ‘There has been a trend of insurers getting out of their life businesses, and the FSA is taking a positive attitude to this kind of acquisition. JPMorgan’s involvement may give them first-mover advantages in what looks like a developing area in the debt markets and we are pleased to have helped them conclude this deal so successfully. Leveraging a life insurance group involves some interesting structural and regulatory issues for lawyers to help bankers with’.
The total purchase price was made up of £750m in cash, with debt provided by JPMorgan and the remainder raised from an equity offering arranged by Lazard, and £100m in preference shares issued to the seller. The life business holds £24.4bn of assets on behalf of policyholders in a number of funds. Royal & SunAlliance has also had the contingent loans it provided to the life operations repaid in full.
Freshfields’ Brian Gray and financial services partner Harvey Nugent were assisted by London based banking associate Chhaya Prasad. Resolution Life Limited and its parent, Resolution Life Group Limited, were advised by Slaughter and May, while Royal & SunAlliance was advised by Allen & Overy.