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Direct will issue high yield bonds. He wants to grow

Direct pojišťovna issues bonds with a four-year maturity and an annual yield of 6.85%. The issue is organized by the Wood & Company financial group. The minimum investment is 10,000 crowns.

The bonds can be purchased through the investment portal opPortunity, which falls under the Port platform from Wood & Company. The first round of subscription lasts until March 23. “After that, the bonds will be offered until they are sold out,” says Nela Maťašeje, a spokesman for Direct pojišťovna.

The bonds will be issued in the amount of up to 650 million crowns. The yield will be paid to bondholders semi-annually. “For example, with an investment of CZK 100,000, we will pay you CZK 2,911 after deduction of tax twice a year, ie a total of CZK 5,822 per year,” the insurance company writes in the investor prospectus.

“The issue comes to the market at a time of rising inflation and offers a very interesting return in relation to risk. This is a unique opportunity for Direct pojišťovna’s clients to participate in the development of their favorite company as an investor in addition to their customer role. It is therefore a unique connection between the investor and client communities, “says Peter Turner, Director of Investment Banking at Wood & Company.

The bonds are issued by Direct pojišťovna’s sister company, Direct Financing. The bonds are fully secured by the insurance company’s shares. Therefore, if the insurance company got into trouble and could not repay the bonds, the bondholders could take over the management of Direct pojišťovna and decide on its possible rescue. In 2021, Direct’s turnover amounted to 2.6 billion crowns and had a profit of 98 million crowns.

“We have been growing for seven years. This is due to innovation and the fact that the client comes first for us. But we want to innovate and grow even faster and show what a normal insurance company should finally look like. And the newly issued bonds are supposed to help us with that, “says Maťašeje.

Direct pojišťovna belongs to the Direct family group, which expanded to include Direct auto last year and thus entered the world of car services. The group also includes Fidoo, which offers solutions for companies in the form of employee spending automation. Over the last two years, the turnover of the entire Direct family has increased from 1.8 to 5.9 billion crowns. Direct is wholly owned by Pavel Vehák, Vigo Investments Group, who is also the Chairman of the Board of Directors of Direct pojišťovna.

Direct insurance company offers car, property or travel insurance. On the contrary, her offer lacks life insurance.

According to the statistics of the Czech Insurance Association, at the end of 2021, Direct was the number one in the non-life insurance market according to the amount of agreed premiums. Its market share was 2.6%. Directif is ahead of Cardif with 2.7%, and the first Generali Česká pojišťovna had 28.3%.

Fio banka recently issued bonds from domestic financial institutions. They were six years old and with an annual yield of 5%. The bank sold them at the turn of December and January and reported great interest. She sold bonds worth 600 million crowns in 13 trading days.

Jiří Hovorka

He has been writing about personal finances since 2009. He started in Měšec, then dealt with the same topics in Aktuálně.cz, and after merging with the Economia publishing house, his texts also appeared in Hospodářské noviny. He has long been dedicated to pensions, … More articles by the author.

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