L&G reaps reward from restructuring its US debt

LEGAL & General has made a £46m pre-tax profit after buying back £271.3m of debt in the US.

L&G has also cut its funding cost by £8m per annum through restructuring the debt, which was required as a reserve by its US life insurance business. The deal will add £82m to L&G’s capital buffers, its IGD surplus, which stood at £3.3bn in August.

L&G was optimistic that dividends from its US life operation would be “sustainable and growing” after it produced a $50m payment in March 2010.

“This announcement demonstrates our continued focus on improving return on capital from every business within the group,” chief executive officer Tim Breedon said.