ANZ P&I deal with IOOF on track, with caveat

Despite the fall-out from the Royal Commission, ANZ and IOOF appear to be on track to complete the sale of the ANZ OnePath Pensions and Investment business to IOOF before the end of the year.

ANZ today issued a statement saying that the two companies were continuing to work cooperatively on the transaction, albeit that ANZ was continuing to monitor IOOF’s response to matters raised by the Australian Prudential Regulation Authority (APRA) before making a decision about the transfer of the business.

It said ANZ completed the legal separation of its P&I business from its Life Insurance business last month and the sale of its Life Insurance business to Zurich was on track for completion on 31 May, 2019.

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The announcement said that as of 11 May, the coupon rate ANZ pays on the debt note subscribed by IOOF had reduced from 14.4 per cent a year to two per cent a year.

It said this related to an agreement reached in July, last year, under which ANZ agreed to transfer a partial economic interest of its Pensions and Investments business and legal ownership of its Aligned Dealer Groups to IOOF from 1 October, last year.

Under the agreement, ANZ received an initial payment of $800 million from IOOF, equivalent to approximately 82 per cent of the economic interests in ANZ’s P&I business, and ANZ paid a coupon rate on the debt note subscribed by IOOF.

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