Aegon sets up two firms to sell bonds

Dutch insurer Aegon has established two companies in Dublin to sell large bonds into the European investment market.

The company plans to issue about €1 billion in bonds each year for the next three years. It has just begun to market the first such issue to institutional investors across the continent.

Jennifer Nickel, marketing manager with Aegon Global Institutional Markets - the company that will issue the bonds - said that the company would sell to investors such as pension funds and sizeable money managers.

The bonds will be secured by a pool of assets such as mortgages and fixed-income securities and will be guaranteed by the second new Aegon entity in Dublin, Aegon Financial Assurance.

Aegon's notes will be listed on the Irish Stock Exchange and will have three to five-year terms. The group will issue at least one benchmark bond of €500 million each year, but will also make smaller issues such as private placements of €15 million.

Ms Nickel said Aegon had "tried and tested" its model in the US for the past 20 years, but that the insurance group now wanted to broaden its geographical scope. "Our new Dublin base allows us to focus on European investors and to develop products tailored for this market."

She said that the Dublin operations, based in the International Financial Services Centre, could move into other investment areas over time.

The Aegon Group is one of the world's largest insurance organisations, with $362.3 billion (€307.2 billion) in assets at the end of June.