Allianz reduces stake in Munich Re

MUNICH,Germany—Allianz S.E., the Munich-based German insurance group, has further reduced its stake in Munich Reinsurance Co. by another 4.5%, down from 9.4 to 4.9% through a bond deal.

The reduction has been carried out by an early redemption of 64.35% of the bond it issued in February 2005 with Munich Re shares.

This partial redemption means that each outstanding bond will be reduced to 35.65% of the original principal value.

The number of Munich Re shares used to redeem the bond will be based on the averages of the DAX index and the Munich Re share price during a 20-day reference period that starts on February 1.

Allianz said that the redemption value has been fully hedged with forward contracts and so it expects that the Munich Re share price will not be affected.

The bond was issued with a principal amount of €1.3 billion. The current market value of the bond is roughly €2.0 billion.