Listed enhanced annuities specialist Partnership has seen its share price drop almost 8 per cent this morning, since announcing that it is not proceeding with a bond offering “at this time”,
Last week, Partnership announced it was considering issuing debt in the form of bonds to raise funds to “explore opportunities to provide the financial flexibility to invest in new initiatives”, as it continues to adapt to the changed environment ahead of new pension freedoms.
Debt issues, such as bonds, are not uncommon among listed firms as a way to raise funds, especially if the issuance of new shares might be considered an unattractive alternative.
At the time of writing last week on 7 January, its shares were priced at 134.70 pence, down 75 per cent from its high watermark since its summer 2013 listing of 528 pence in July of that year, and they are currently priced at 123.91, down 9.8 pence this morning.
In an announcement on the stock exchange, Partnership thanked debt investors for their “significant interest and engagement” during the fixed income meetings held in recent days.
Steve Groves, Partnership chief executive, said: “It is logical for us to explore the opportunities to diversify the Group’s sources of funding at economically attractive rates. However, we have elected not to proceed with a transaction at this time.”
Since the radical pension reforms were announced in the Budget, Partnership and other specialist annuity providers have seen their share price plummet. On the day of the speech Partnership’s share price fell by 55 per cent as it shed £700m in value.
Its results, published in October, revealed that the firm was focusing on “diversifying our business model and positioning it for the new retirement market is undiminished”.
In June, Partnership announced that approximately 100 roles across its London and Redhill offices would be cut as part of cost savings further to those outlined in early 2014. The proposals are expected to generate annualised cost savings of £21m in 2015.
peter.walker@ft.com, donia.o’loughlin@ft.com
