Thursday, November 12, 2009


I own several of the Aegon hybrids. AEGON reported results this morning for the 3rd quarter. Net income was reported at 145 million EUROs, with underlying earnings before tax of 351 million Euros. Aegon reaffirmed its plans to repurchase on 11/30/09 the 1 billion EUROs in state aid received by the Dutch government. This will be accomplished by repurchasing from its majority shareholder Junior Securities to the hybrids. As I discussed in previous posts, this will trigger four mandatory payments on the hybrids starting with the December 2009 payment. See Item # 3: /Impact of Any Payment to Dutch State in May; Nail on the Head for Aegon Mandatory Payment Event?; Pay Back Dutch Government=Buying Junior Security=Mandatory Payment Event/Bond Investing Process

After repaying 1 billion in Euros to the Dutch state, Aegon will have around 3.7 billion Euros in excess capital. A summary of the earnings release can be found at MarketWatch and the While the owners of the common are not satisfied with this report, I am okay with it as an owner of the hybrids only. A repurchase of those Junior Securities on 11/30 will also relieve some anxiety over the short term about potential deferrals of the hybrid coupons.

I checked the quotes on the hybrids this morning. I noted that Aegon must have declared the quarterly payments since an ex date for the December payments were listed, and I will check the dividend page at the WSJ to see if they are listed tonight. The ex dividend date is shown as November 27th with the payment on 12/15/2009.

I also checked the ING hybrids that I own, and they also show an ex dividend date of 11/27.

Added 2:28: I am not going to assume anything about the EC. Until Aegon actually pays that 1 billion Euros back on 11/30, no one can be 100% certain that it will happen. I did note in the WSJ story linked above in this post that referenced comments from Aegon's CFO who said that AEG had not yet heard back from the EC on its restructuring plan. Given the havoc that the EC has already caused, and the damage it has inflicted on its financial institutions long term, nothing can be assumed.

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