KBC Group: KBC successfully places an Additional Tier-1 instrument for 500 million euros

Press Release
Outside trading hours - Regulated information*

NOT FOR DISTRIBUTION OR RELEASE IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, OR JAPAN OR THEIR TERRITORIES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S., AUSTRALIAN, OR JAPANESE PERSONS OR OTHERWISE THAN TO PERSONS TO WHOM IT CAN LAWFULLY BE DISTRIBUTED. 

THE ANNOUNCEMENT OF A POTENTIAL ADDITIONAL TIER 1 TRANSACTION IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF KBC GROUP NV. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

Brussels, 27 February 2019

KBC successfully places an Additional Tier-1 instrument for 500 million euros

KBC Group NV ("KBC") yesterday placed 500 million euros in non-dilutive, Additional Tier-1 (AT1) securities (the "Securities"). There was considerable interest in the issue, which was 4 times oversubscribed.

Johan Thijs, KBC Group CEO commented on the transaction as follows: 'We continuously monitor our capital structure and our current portfolio of outstanding securities in light of market conditions. The issue of the Securities enables us to maintain an optimal capital structure and continue to support our already excellent solvency ratios. There was considerable interest in the issue of our euro-denominated CRD IV-compliant Additional Tier-1 instrument of benchmark size, which was 4 times oversubscribed. The success of the transaction emphasizes the trust of the market in KBC's solid capital position and business model.'

KBC is one of the best capitalised and well-positioned financial institutions in Europe. KBC's common equity ratio under the Danish Compromise came to 16% fully loaded at the end of 2018, well above the minimum capital requirements set by the competent supervisors of 10.70% by 2019.

This AT1 instrument will be 5-year non-call perpetual with a temporary write-down at 5.125% CET1 and an initial coupon of 4.75% per annum, payable semi-annual.

The instruments were placed with institutional investors spread across Europe and Asia.

The Securities were offered in minimum denominations of 200 000 euros and are expected to be rated 'BB+' by Standard & Poor's ("S&P") and 'Ba1' by Moody's. The Securities are expected to be issued on 5 March 2019. Application will be made for the Securities to be listed on Euronext Brussels.

Bank of America Merrill Lynch, BNP Paribas, Credit Suisse, Goldman Sachs International, J.P. Morgan and KBC Bank were mandated as Joint Bookrunners and Joint Lead Managers for this transaction.

Disclaimer

The announcement of a potential additional tier 1 transaction shall not constitute an offer of securities for sale in the United States (or to U.S. persons). The Securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act) or the securities laws of any state of the United States or any other jurisdiction and the Securities may not be offered or sold within the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. The announcement of a potential additional tier 1 transaction is being distributed only to and directed only at (i) persons who are outside the UK, or (ii) persons who are in the UK who are (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or (b) otherwise, persons to whom it may otherwise lawfully be distributed. Furthermore this announcement is not addressed to any person (i) who is a retail client (as defined in Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EC (recast) ("MiFID II")) or (ii) in Belgium to any "consumers" (consumenten/consommateurs) within the meaning of the Belgian Code of Economic Law (Wetboek economisch recht/Code de droit économique) dated 28 February 2013, as amended from time to time (the "Belgian Code of Economic Law").  The announcement of a potential additional tier 1 transaction shall not constitute an offer of Securities to the public in Canada. No prospectus qualifying the Securities for sale in Canada has been approved by any regulator or regulatory authority in Canada and the Securities may not be offered or sold in Canada or to residents of Canada except pursuant to an exemption from the prospectus requirements of, and otherwise in compliance with, all applicable securities laws in each relevant province or territory of Canada. The announcement of a potential additional tier 1 transaction is directed only at persons that are accredited investors and are permitted clients and should not be distributed to, or acted upon by, any other persons. 

MiFID II professionals/ECPs-only / No PRIIPs KID / FCA PI restriction  - Manufacturer target market (MIFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as not available to retail in EEA. 

For more information, please contact:

Kurt De Baenst, General Manager, Investor Relations, KBC Group
Tel +32 2 429 35 73  - E-mail: kurt.debaenst@kbc.be

Viviane Huybrecht, General Manager, Corporate Communication/Spokesperson, KBC Group
Tel +32 2 429 85 45  - E-mail: pressofficekbc@kbc.be

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