QBE management is resetting the fixed rate of its subordinated notes…
The post QBE (ASX:QBE) share price slides on fixed-rate reset notice appeared first on The Motley Fool Australia. –
The QBE Insurance Group Ltd (ASX: QBE) share price finished Thursday’s trading session in the red. This comes after the insurance giant provided a market release in relation to its subordinated notes.
QBE shares are 2.9% down to $11.70 apiece at the closing bell today. In comparison, the S&P/ASX 200 Index (ASX:XJO) is down 0.60% to 7,485 points.
Let’s take a closer look at the update the company gave the ASX today.
What did QBE announce?
In today’s statement, QBE announced a proposed issue of GBP (British pound sterling) fixed-rate resetting subordinated notes. This comes under the umbrella of the company’s US$4 billion note issuance debt program.
Also referred to as a floating rate note, the fixed-rate security pays a coupon determined by a reference rate that resets periodically. In essence, the payment received is not fixed and will change over time.
Investors are usually attracted to floating rate notes because when interest rates increase, the coupons do, too. This ensures the notes trade at par or above in the market.
QBE noted that if it proceeds with the subordinated notes, then pricing and further details will be released in another announcement.
It’s evident that the company is committed to maintaining a strong capital position through optimising its capital structure. The US$4 billion note issuance program is intended for use with future debt issuances.
About the QBE share price
Over the past 12 months, QBE shares have been somewhat volatile, moving in peaks and troughs throughout the period.
While the QBE share price has gained about 16% since this time last year, it’s still heavily down from pre-pandemic levels.
In early 2020, the QBE share price was swapping hands for as high as $15.19 before plummeting to record lows in the COVID-19 crash.
Based on today’s closing price, QBE commands a market capitalisation of $17.29 billion, with more than 1.475 billion shares outstanding.
Should you invest $1,000 in QBE right now?
Before you consider QBE, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and QBE wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.