PIC completes £1.3 billion buy-in with FTSE250 company, Coats Group plc

PIC, a specialist insurer of defined benefit pension schemes, has concluded a £1.3 billion buy-in¹ of the Coats UK Pension Scheme ('the Scheme'), covering the pensions of 18,042 Scheme members. 

Transaction detail:

• to manage the Scheme’s complex illiquid asset holdings, PIC received illiquid assets in specie and agreed a deferred premium to allow timely redemption of further illiquid holdings
• facilitated by upfront contribution from Coats to move responsibility for the Scheme’s assets and liabilities to PIC
• the Scheme previously completed a buy-in in 2022, covering £350 million of liabilities². This transaction covers the remainder of the Scheme.

Coats is a world leader in thread manufacturing and structural components for apparel and footwear, as well as an innovative pioneer in performance materials. These critical solutions are used to create a wide range of products, including ones that provide safety and protection for people, data, and the environment. Headquartered in the UK, Coats is a FTSE250 company and a FTSE4Good Index constituent.

Chris Martin, Chair of the Trustee of the Coats UK Pension Scheme, and Executive Chair at Independent Governance Group, said: “This is a significant transaction for the Scheme members, who now all have their pensions guaranteed by a UK pension insurance company, and for the sponsor, which has fully de-risked the pension scheme for which it is responsible. The Trustee is delighted to complete the transaction. I want to thank PIC for their innovative, flexible approach to addressing the complexity of the illiquid holdings, as well as  our advisors LCP, Redington and Sackers for their support throughout. Critical to delivering this outcome and the continuity of service to members has been the outstanding team at the Coats Pensions Office.”

Jackie Callaway, Chief Financial Officer at Coats Group PLC, said: “Shareholder sentiment was overwhelmingly positive following the previous Scheme buy-in and we were therefore very pleased to be able to help facilitate this transaction. Our contribution neatly aligns shareholder interests, by removing sponsor responsibility for the Scheme’s assets and liabilities, with those of Scheme members, who now all have their pensions insured.”

Matt Richards, Head of Origination Structuring at PIC, said: “We are proud to have been able to complete this complex transaction, demonstrating our commitment to meet trustee needs in challenging circumstances. It was a pleasure to work with Chris and the trustee team on this transaction. One notable feature of this transaction was the active support from Coats as sponsor, reflecting their experience of positive sentiment achieved by aligning shareholder and Scheme member interests.”

LCP acted as lead transaction consultants. PIC received legal advice from Herbert Smith Freehills. The Trustees received actuarial advice from LCP, legal advice from Sackers and investment advice from Redington. The company advisors were Isio and Baker McKenzie.

 

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Notes to Editors:

1. a buy-in is an insurance policy bought in the name of the trustees and held as an asset of the scheme. The trustees remain responsible for the administration and ongoing payments to members
2. the Trustee previously purchased a similar policy with Aviva in 2022. Together with the policy from PIC, the Trustee has now secured the benefits of all members.

For further information please contact:         

PIC   
Clive Booth              
+44 (0)7780 599247
[email protected]

Apella Advisors                                    
Arne Wyse             
+44 (0) 7818 497469                   
[email protected]

 

About PIC
The purpose of PIC is to pay the pensions of its current and future policyholders. PIC provides secure retirement incomes through comprehensive risk management and excellence in asset and liability management, as well as exceptional customer service. At year end 2023, PIC had insured 339,900 pension scheme members and had £46.8 billion in financial investments, accumulated through the provision of tailored pension insurance buyouts and buy-ins to the trustees and sponsors of UK defined benefit pension schemes. PIC has made total pension payments of £13.6 billion to its policyholders and has invested £13 billion in the UK economy, creating considerable social value. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (FRN 454345). For further information please visit www.pensioncorporation.com