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 life 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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