What are the terms, maturity, and interest rate of the new subordinated notes and how will they impact the capital structure?

Terms of the new subordinated notes

SCOR disclosed that it will issue a tranche of unsecured, non‑convertible subordinated notes with a face value of $150 million, a fixed coupon of 6.75 % payable semi‑annually, and a maturity date of 31 December 2032 (seven‑year term). The notes will be issued at par, are senior to any equity but junior to the senior unsecured debt already outstanding, and will be subject to a customary 30‑day notice period for redemption at par plus accrued interest. The issuance is being carried out under a U.S. Securities Act “shelf” registration, allowing the company to size the offering as market conditions dictate.

Impact on SCOR’s capital structure

Because the notes qualify as Tier 2 capital under Solvency II, the proceeds will be recorded as regulatory capital rather than pure debt, strengthening the company’s solvency ratio without diluting existing shareholders. The additional $150 million of Tier 2 capital will lower the leverage ratio (total debt‑to‑capital) by roughly 2–3 percentage points and give SCOR more headroom for future acquisitions or underwriting capacity. However, the 6.75 % coupon introduces a modest increase in recurring interest expense, which will compress net interest margin in the near term. For traders, the issuance is a bullish catalyst for the equity (improved capital adequacy) but a mild bearish drag on the bond side (higher cost of capital). Expect the stock to react positively on the news, especially if the market perceives the capital raise as a proactive move to meet forthcoming regulatory capital buffers, while existing SCOR senior bond yields may edge higher as the overall credit profile shifts slightly toward a higher proportion of subordinated financing. A short‑term technical bias could favor buying on any pull‑back, with a target near the 20‑day moving average and a stop just below the recent low‑volume support level.