Just Group completes £375m fundraising to meet new regulations

Retirement services firm Just Group shares fell again this morning as it announced it had completed a £375m fundraise to comply with new capital requirement rules.

The firm, which unveiled heavy 2018 pre-tax losses earlier this month, said it had issued £300m worth of bonds and raised an extra £75m via an equity placing.

The move comes after new rules dictated firms such as Just Group must put aside more capital to counteract the risk of equity release mortgages.

Just Group’s bonds will be listed on the Euro MTF market of the Luxembourg Stock Exchange and are rated BBB-minus by credit rating agency Fitch. They have an annual interest rate of 9.375 per cent payable every six months.

Just, which provides life insurance and pensions, has said the new money will give the firm a stronger capital base and will allow it to focus on growing profits, as it struggles in the face of economic uncertainty.

The firm fell to a pre-tax loss of £86m last year, which it said was driven by changes to property assumptions amid uncertainty relating to Brexit.

Chief executive Rodney Cook said the package was “selected after careful consideration to optimise the capital mix and level”.

“The new capital has come at a cost and we are acutely conscious of our duty to manage our capital position carefully.

“We have a plan in place to deliver capital self-sufficiency from 2022 which focuses on growing profits rather than sales through disciplined pricing.”

In December the firm welcomed the Bank of England’s final decision on equity release mortgages, saying it offered “greater clarity” for its future operations.