ING USA IPO to Price in $21-24/Share Range

ING

announced today that ING U.S., Inc., its U.S.-based retirement, investment and insurance  business, has filed a preliminary prospectus with the U.S. Securities and Exchange Commission (SEC) in connection with its proposed Initial Public Offering (IPO). The proposed IPO will consist of both a primary component offered by ING U.S. and a secondary component offered by ING Group, both at a currently estimated price range of USD 21.00 to USD 24.00 per share. Based on this price range, the total offering would be USD 1.4 billion to USD 1.5 billion in size, including USD 0.6 billion in primary proceeds for ING U.S. and between approximately USD 0.8 billion and USD 0.9 billion in proceeds from the secondary offering for ING Group. The proposed IPO would reduce the ownership of ING Group in ING U.S. to 75%.               The underwriters have the option to purchase an additional number of ING U.S. shares from ING Group at the initial public offering price, corresponding to a maximum of 15% of the total number of shares offered in the proposed IPO. Fully exercising this overallotment option would further reduce ING Group's remaining stake in ING U.S. to approximately 71%. ING Group intends to use the proceeds from the secondary offering for the reduction of Group core debt. The USD 1.5 billion contingent funding facility currently in place between ING U.S. and ING Bank N.V. will also be cancelled upon completion of this offering. The offering announced today will not impact the profit and loss account of ING Group, as ING U.S. will continue to be fully consolidated by ING Group. Upon completion, and excluding the overallotment option, this offering would have a negative impact of approximately EUR 1.6 billion (at the midpoint of the estimated price range) on the Shareholders' equity of ING Group. This reflects the difference between the net proceeds of this offering to ING Group and the estimated IFRS book value of the 25% stake divested through this offering at IPO. This offering will not have a material impact on the regulatory capital of either ING Insurance or ING Bank. As previously announced, ING Group is divesting its insurance and investment management businesses as part of a restructuring programme agreed with the European Commission. The base case for the divestment of ING U.S. is through an IPO as described in this announcement. Following the proposed IPO, ING intends to divest its remaining stake in ING U.S. over time, as previously agreed with the European Commission. The sale of any remaining shares is subject to a lock-up period of 180 days from the publication of the final prospectus. ING U.S. is in the process of preparing its consolidated U.S. GAAP financial statements for the quarter ended 31 March 2013, and has included in the prospectus preliminary qualitative statements on its first quarter results. Based on preliminary estimates and subject to completion of its financial closing procedures, ING U.S. expects the quarter's operating earnings before income taxes for the Ongoing Business to be materially consistent with the trends previously disclosed in the registration statement and reflecting continued execution on its business development and performance goals. The preliminary prospectus notes that ING U.S.'s  Closed Block Variable Annuity equity hedge program focuses on protecting regulatory and rating agency capital rather than earnings, and will generate losses when equity markets increase. Given the significant equity market appreciation during the first quarter of 2013, which is economically a positive for ING U.S. over the long term, as well as the impact of non-performance risk, ING U.S. may incur a net loss on a Company consolidated basis. This summary is not a comprehensive statement of the financial results of ING U.S. for this period, and actual results may differ materially from these estimates due to the completion of financial closing procedures, final adjustments and other developments that may arise between now and the time that the consolidated financial statements for this period are issued. ING U.S. expects to be in a position to supplement this summary with further information regarding its results prior to the pricing of this offering. Morgan Stanley & Co. LLC, Goldman, Sachs & Co., and Citigroup Global Markets Inc. are acting as active joint book-running managers for the offering.