4.4 Legal risk - Scor

Libor rate plus (i) 0.80% for the first ten years and (ii) 1.80% thereafter. The Group decided not to redeem the
USD 100 million of subordinated floating rate notes due 2029 at their first call date in June 2009.
During 2011, the Group re-purchased USD 33 million out of its own USD 100 million debt, at a price of 82.5%. The purchase
price of this debt at a discount rate gave rise to a consolidated pre-tax profit of EUR 4 million.
(b) EUR 100 million
The Company issued, on 6 July 2000, EUR 100 million in 20-year subordinated bonds, redeemable by SCOR each quarter
as from the tenth year following their issuance. These floating-rate bonds bear interest indexed on the 3-month Euribor plus
(i) 1.15% for the first ten years, and (ii) 2.15% thereafter. The Group decided not to redeem the EUR 100 million of
subordinated bonds due 2020 at their first call date in July 2010.
During 2009, the Group provided liquidity to both its perpetual super-subordinated debt security (Tier 1 type) (TSSDI
EUR 350 million) and its EUR 100 million subordinated debt issuance (call date July 2010) resulting in acquisition of own
debt of EUR 99 million at an average price of 46.5%. The purchase of this debt at a discount gave rise to a consolidated
pre-tax profit EUR 53.4 million which is included in other operating income during 2009.
(c) EUR 50 million
EUR 50 million Perpetual Step-Up subordinated notes were issued on 23 March 1999. These notes were redeemable at the
issuer’s option after 15 years following their issue date, and at a 5-year interval, beyond the 15 years. The floating-rate notes
bore interest indexed on the 6-month Euribor plus (i) 0.75% for the first fifteen years of the issue, and (ii) 1.75% beyond the
15 years.
During 2012, the Group re-purchased the entire tranche of its EUR 50 million perpetual subordinated Notes, at a price of
80%. The purchase price of this debt at a discount rate gave rise to a consolidated pre-tax profit of EUR 10 million.
Covenants applicable to the aforementioned notes:
These clauses, which are binding on the issuer, allow for anticipated reimbursement in the following circumstances:
• A change in legislation or tax law which would deprive the bondholders of all or part of the interest payments
stipulated in the initial “operating note”.
• A change in the accounting of the instrument on the basis of accounting principles in France or the U.S., or
changes in methods used by rating agencies which become unfavourable for SCOR.
• The liquidation or the complete sale or dissolution of the Company pursuant to the merger, consolidation or
amalgamation with a third party, if such party fails to assume all obligations of the Company under the notes.
(d) EUR 350 million
On 28 July 2006 SCOR issued a perpetual super-subordinated debt security (Tier 1 type) in an aggregate principal amount
of EUR 350 million to finance the acquisition of Revios Rückversicherung AG. The bond issue, comprised of last-rank
subordinated bearer certificates with a face value of EUR 50,000 bearing interest at an initial rate of 6.154% per annum then
a floating rate indexed on the 3-month EURIBOR plus a margin of 2.90%, payable quarterly. There is no fixed redemption
date but SCOR reserves the right to redeem, in part or in whole, the bonds as from 28 July 2016.
The debt includes a clause for mandatory settlement in cash if regulatory authorities or applicable legislation modify their
ability to cover the solvency margin or equivalent. If this clause becomes applicable, the issuer must pay interest in cash
even if no dividend has been paid, or proceed with the reimbursement of the notes in cash. Accordingly, the entire issue is
considered as a financial debt.
During 2009, the Group provided liquidity to both its perpetual super-subordinated debt security (Tier 1 type) (TSSDI
EUR 350 million) and its EUR 100 million subordinated debt issuance (call date July 2010) resulting in acquisition of own
debt of EUR 99 million at an average price of 46.5%. The purchase of this debt at a discount gave rise to a consolidated
pre-tax profit EUR 53.4 million which is included in other operating income during 2009.
(e) CHF 650 million perpetual subordinated debt
On 2 February 2011, SCOR issued CHF 400 million perpetual subordinated notes, redeemable by SCOR each quarter as at
payment of interest dates from 2 August 2016. The coupon has been set to 5.375% (until 2 August 2016) and 3-month CHF
LIBOR plus a margin of 3.7359% thereafter.
SCOR has entered into a cross-currency swap which exchanges the principal into EUR and exchanges the CHF coupon on
the notes to EUR 6.98% and matures on 2 August 2016. Refer to Note 8 – Derivative Instruments for Currency Swap fair
values. On 11 May 2011, SCOR reopened its existing CHF perpetual subordinated notes placement by issuing an additional
amount of CHF 225 million. The placement was increased to CHF 250 million at the settlement date of 3 June 2011, given
the market appetite. The notes are fungible to those issued on 2 February 2011. The conditions and the accounting
treatment are similar to the first placement.
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