Good day, and welcome to the Aegon Second Half Year 2018 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jan Willem Weidema. Please go ahead, sir.

Thank you, Azur. Good morning everyone and thank you for joining this conference call on Aegon's second half 2018 results and medium term targets. We would appreciate it if you take a moment to review our disclaimer on forward-looking statements which you can find at the back of the presentation. Our CFO Matt Rider will walk you through the highlights of the second half of 2018 before handing it over to our CEO, Alex Wynaendts to provide an overview of our key strategic achievements and new medium term targets. Given we are not only presenting our results but also laying out new targets at this presentation; it will be somewhat more extensive than usual. However, we will of course leave more than sufficient time for your questions at the end. I'll now hand it over to Matt.

Good morning everyone. Thank you all for your continued interest in Aegon and for joining us on today's call. Although this was a challenging and complex half year with many moving parts, we have achieved some very important milestones which are shown on this slide. We have delivered on our EUR 350 million expense savings target. In addition, we have made strong progress on resolving the servicing issues related to the Cofunds integration. I'm pleased to report that we have maintained our strong capital position and are reporting 211% Solvency II ratio at the end of 2018 despite unfavorable market impacts. In addition, our holding excess cash position ended well within our target range at EUR 1.3 billion, while we continued to manage our leverage ratio down. Normalized capital generation after holding expenses for the full year 2018 rose to EUR 1.4 billion which further supported increasing remittances from the operating units to the Group. This leads our dividend payments to shareholders well covered as the full year end dividend will increase by EUR 0.02 to EUR 0.29 per share. Now, I would like to take you through our financial results in a bit more detail starting with our earnings. I am now on Slide 3. During the second half of 2018, underlying earnings declined by 8% compared with the same period last year despite the benefit from expense savings. Our ambitious expense savings program led to an uplift of EUR 38 million compared with last year. Underlying earnings also benefitted from business growth in Spain and Portugal, higher interest margins in the Netherlands and continued growth of the UK platform business. However, the overall result was impacted by lower earnings from US Retirement Plans and adverse claims experienced in the US. The lower earnings from US Retirement Plans were…

Thank you, Matt, and good morning to everyone. In my part of the presentation, I’ll present a new set of medium-term targets for the period 2019 to 2021. But let me first outline our achievements for the period 2016 to 2018. I am starting here with Slide 15. In the past years, we have simplified and modernized our Group. We have refocused the business towards areas with higher growth and the potential for broader advice, service and solutions-based relationship with all of our customers. We’ve built the company to be more relevant than ever into our 29 million customers, as we help them through the journey of the financial lifetime. In doing so, we've not only significantly increased our free cash flow, but also strengthened our capital base. And today, we have a well-established capital framework with strong Solvency ratios for our main units and for the Group. One example of our measures to further improve the capital position of the Group was the elimination of the variable annuity captive in the US in the second half of 2018. Furthermore, we’ve optimized our portfolio over the past few years. We have rationalized our geographical footprint by focusing our resources on key markets where we have either leading market positions and scale or where we have strong growth opportunities for the future, and the most recent example being the completion of the divestment of operations in Slovakia and the Czech Republic on January 8, 2019. I am proud of what we have achieved over the past three years. And during that period, we've attracted nearly 4 million new customers and more than EUR 100 billion of additional assets. Having improved our competitiveness, strengthened our capital position and diversified our business, we are now in a position to fully focus on growing…

Thank you. [Operator Instructions]. We will now take our first question from Robin van den Broek from Mediobanca. Please go ahead. Your line is open.

Yes. Good morning, everybody. I guess my first question is on the definition change of the leverage ratio. I mean it's quite a big step change and you're still sticking to the lower end of the target range, which effectively means that a lot of capital that's coming in, in future years is allocated to reducing the leverage versus the previous definition. So I was just wondering what's triggering that and to get a little bit more color on that because I think that's probably also the reason why the shares are fairly not very responsive to your new targets? In relation to that I was just thinking about how should we think about dividend progression? I mean I think the EUR 0.01 added to the full final dividend I think is supportive but the payout ratio of 45% to 55% is not indicative for progressive dividends per se. So just wondering if you look at your holdco cash level, your Solvency II levels, your gross cash generation guidance for 2019, I mean, these are all pretty supportive to keep that dividend growing. I was just curious to see when you would adopt the higher end of the payout ratio and when would you adopt the lower end of the payout ratio? And thirdly, I guess US reporting has been somewhat disappointing throughout 2018. I guess we can blame markets for a certain extent. But I was just wondering I mean commercial momentum still needs to turn around, you’re suffering margin pressure, still you’re talking about growth while markets going forward might be a lot less supportive than they have been in last years. I was just wondering what kind of gross inflows are you baking into your business plan to get to your growth ambition levels? Thank you.

Okay. Thanks, Robin, this is Matt. Maybe on the definition of the leverage ratio, this was a -- we took a look at what peers were doing, we were taking a look at how the rating agencies were looking at as leverage in the capital base and we made this move to align with peers. The actual -- I guess Aegon had implemented this adjustment where we were adding back the remeasurement of defined benefit plans back in 2013 in order to keep the -- and this relates to an accounting change that was implemented at that time for IFRS. And we did it at a time to make sure that we kept the capital base stable and to make sure that it was not too volatile. But then having looked at what peers were doing and what rating agencies and how they were looking at it, we decided to make the change. Now, having said that, so we're not going to -- as you mentioned, we are not going to change our target ranges and this does reflect the fact that we do want to move the leverage ratio down over time. But it doesn't necessarily represent massive amounts of additional deleveraging. We are retaining earnings in excess of the amount that we're paying out as dividends. So I think that's an important component. We would see this drip down over time to the extent that we retain earnings. With respect to the dividend progression, I think what we wanted to do is set a capital generation target, a 3-year capital generation target that we felt that we could really make. We set that 45% to 55% target range, just to give you some guidance as to how we intend to deploy that capital. The EUR 0.02 dividend increase for this year, it should send you a -- it should send a strong signal that we have confidence in the progression of being able to generate normalized cap or being able to generate capital. But we are not giving any guidance further than that. So we want to stick to one-year guidance at a time, gross remittance target from the business units one-year at a time and the overall 3-year capital generation target. But again, I think you should take something from the fact that we increased the dividend EUR 0.02 today.

Let me take you through the third question. You asked -- you are absolutely right to say that the sales development in 2018 in US has been disappointing. We have of course been working very hard on the transformation of our business. We spent a lot of efforts in getting the TCS outsourcing deal done. We feel therefore that today we're well-placed and that a lot of the steps we have to take in order to be well prepared to grow. We've taken those steps and we can now focus on the growth in the coming years. It's difficult to give you a number of net flows and deposits, because as you know, you have deposits of all different categories with different margins. But what I think would be helpful is to guide you and to remind you that actually we have in our plan, as shared in terms of capital generation baked in a 20% increase of our new business trend from low level of EUR 850 million. So I think that will give you a good indication of how we are intending to invest in growing our business going forward. And which areas in the US are going to be most focused on is in individual life, it’s IUL product, as you know that's a market that we know well, and we have very strong distribution capabilities. Term life also we've done some re-pricing at the end of last year and we are seeing the benefits here. And of course, the big focus will continue to drive positive net inflows in our retirement business. The Mercer acquisition has brought us a capability, which we didn't have before, which is really in the mega cases. So we expect to see this year not a positive impact of the full integration of Mercer and therefore a more successful development in terms of new business sales in particular in the big cases. All I can say at this point in time that we -- on the base of what we've seen in January, we are pretty encouraged about the development.

Maybe one follow-up on the leverage ratio. I think in the past you've said that IFRS 17 would negatively affect the leverage ratio. I presume that's still the case. But will you still be targeting a low-end of the target range after IFRS 17 or is this basically just in anticipation of IFRS 17?

I think what I said is we don't know exactly where IFRS 17 is going to come out. So let's say the prudent move would be to reduce leverage in anticipation of that, but we have to see exactly where it comes out. And then at that moment, we may decide to reset our target ranges. But it looks like today that, that time might not come until 2022. So, for right now we stick with these target ranges.

Thank you. We will now take our next question from Farooq Hanif from Credit Suisse. Please go ahead. Your line is open.

Hi there. Thank you very much. And good morning. Firstly, just returning to the US Retirement Services business. Looking at all the drivers that you showed off the lower profits in the second half of '18, it seems to me that some of this is kind of a continuing effect in 2019. So I was wondering if, as of today you're $52 revenue per participant guidance that you gave still stands or whether as of today there might be a slight reduction on that in the near term? And just going back to what you said about flows in January, are you basically seeing now positive net flows? That's question area one. And then question two on numbers. You've given the target components for the EUR 4.1 billion of cumulative capital generation. So that's EUR 3 billion strain, EUR 8 billion normalized capital generation and EUR 1 billion of holding. What were those numbers for the last three years so we can see what's changed the mix? Thank you.

So I’ll take the first one on the under Retirement Services business. I think you're right. I think the guidance that we had given was $52 per participant. I think the last number that I saw was something a little north of 4.2 million participants. I would expect that the $52 would come down somewhere between 5% and 10% as a consequence of these ongoing things that you rightfully mentioned. In terms of flows for January, without giving any numbers, so far they look pretty positive. Looking at the -- you asked the question about the composition of the capital generation for the three year target, I think we're going to have to come back to you for the last three years of historical information there, but I think can be done offline.

Thank you. We will now take our next question from Ashik Musaddi from JPMorgan. Please go ahead. Your lineis open.

Hi. Thank you and good morning Alex. Good morning, Matt. Just a couple of questions. Sorry, going back to the capital generation and the dividend. So if I think about your guidance of EUR 4.1 billion, it's over three years. So is it fair to say that it would be like an increasing numbers i.e. starting with a lower number in 2019 followed by a higher and then higher after that, is that fair to say? And just in terms of payout ratio 45% to 55%? I mean, if you let's say, get into a normal market, basically, rather than super volatile market, is it fair to say that a 50% payout ratio is more reasonable, rather than going towards 45% or 55%? I mean, we are just analysts so we are just taking like 50% payout ratio is what I think -- is what the guidance looks like. So any thoughts on that would be great. And thirdly, is in terms of the same capital generation. Can you give us some clarity as to -- about the geographical breakdown as well on that number? Any thoughts on US, how much Netherlands and how much UK you're expecting any thoughts on that would be great? Thank you.

So I’ll take the first one. So you mentioned what do we think that the progression of the normalized capital generation might be, so we telegraphed the EUR 4.1 billion over the next three years. I think you’ve got it pretty right, we generated EUR 1.4 billion in capital generation in 2018, that was based on basically a surplus strain of about EUR 860 million for the year, that's probably a EUR 100 million or so light of where we thought it might be. So you can kind of use that as a guide for trajectory. In terms of the capital generation for each of the countries, what we did in the target is try to group things in buckets at kind of a high level. But I think we can probably come back to you on country level detail on that one. But our goal here is -- and this is sort of an important one, we want to make sure that we're putting a very limited number of targets into the market. So, putting capital generation out there for the Group for a three year period and the payout ratio of 45% to 55% and the 10% ROE with a one year of remittance guidance, that's about all we’re -- that's all what we're going to do in terms of targets. We don't want to break it down too much more than that. We do it we do it in aggregate just to limit the number of targets that we get out.

Sure, I just have one follow-up on that I mean you mentioned around 45% to 55% payout, so you’ll still retaining around 50% cash, which is still a healthy amount around EUR 600 million, EUR 700 million a year. I mean, what would be your -- I mean, the priority list for that, I mean, will it be leverage reduction, first; M&A, second? Because -- and any thoughts on what are on the file, what are on the table on the M&A perspective at the moment?

May be let me answer this question. You’re rightly pointing out that we are retaining capital for flexibility. I mentioned that in my presentation. We have said that we need to ensure that we cover of course our own expense holding cost, the cost of leverage. That’s the first thing. Matt addressed also just now leverage, we want to stay in the middle of the range of our leverage ratio. But importantly also we want to have flexibility for add-on acquisitions. We've done a few which I think have demonstrated that we're able to like Cofunds and Mercer, small add-on acquisitions which effectively bring in a lot of new customers on our existing platforms and that’s a very effective way for us to attract new customers and growing our business. And as I said in my introduction on the target, the remaining part will be what we consider to be return to shareholders.

Thank you. We will now take our next question from Nick Holmes from Societe General. Please go ahead. Your line is open.

Thanks very much. Just a couple of questions on the US. First, how concerned are you about another potential market downturn, especially since the retirement business took a pretty big hit just on the Q4 market slump? And then a wider question. Are there any circumstances in which you might consider IPOing the US business? Some tricky questions, I know. Thank you.

Well, Nick, I think these are questions that are really reasonable questions in relation to the market. You're right to say that the market has had an impact on our pension business, but it is not only on the fees because effectively what you see is that assets decline in value and therefore the fees decline in value. But also in uncertain times, people are not so prone to make changes and to invest for the future so they’re kind of holding off a little bit. So what you see is that market downturns are usually not very good also for new business because people just decide to postpone a decision to take. On the US, I will repeat what I think you know that US is an integral part of organization, has been very supportive of the Group and will continue to be an integral part of organization as supportive of the Group in terms of capital generation and supporting us paying the dividends.

And, sorry just quick follow-up, in terms of synergies between US and the rest of the Group, can you identify any sort of business rationale for having such a large US operation?

Well there is quite a lot of benefits. First of all there is a diversification benefit. There is diversification benefit in being present in different parts of the world from a economic cycle point of view, from a business side point of view, and also, therefore, from a technical point of view. So I think it's extremely important to recognize the diversification benefit directly and indirectly coming across in the amount of capital that we would need to hold. What we also make sure is that we leverage from an operational point of view as much as we can. So as you know, we have a separate Technology Group that provides services to each of our units around the world. They can of course leverage scale which we could not do if we didn't have to group together. We have a asset management operations, a global asset management operation that has scale, the capabilities that it would not have if it would be in different parts of the world instead of in different parts of the world. And then finally one of the things which I think we should also not forget in addition to the operation -- around IT procurement and others is that we need to be able to continue to attract good talent, strong talent. There is a war in talent. We are changing our business into a much more digital business and much more technology-driven business. And we therefore need to attract the right people. I can assure you that it is much easier for Aegon to attract the right people by being part of a global operation, global organization, very visible in the Netherlands, very visible in the US and that is the long-term benefit that I think we should not underestimate.

Thank you. We will now take our next question from William Hawkins from KBW. Please go ahead. Your line is open.

Hello, thank you very much. First of all, the Dutch mortality and lapse assumption changes, do they have any impact on future earnings, if you could guide on that that will be helpful? Thank you. Secondary, Long-Term Care good news doesn't seem to be much of a feature in the second half, at least in the headlines, but is there anything that we should be thinking about in terms of Long-Term Care sensitivity through 2019, in particular, I think the morbidity improvement assumption is still embedded and I'm not sure what the timetable and likelihood of adjusting that is? And then lastly, maybe this is unfair, but I’d just like to understand the color. Your $52 Retirement Plan guidance was only given sort of two months ago. So to the extent that you're now guiding that down about 5% to 10% as you just said, does that basically reflect the fact that sort of a target was like one of those things that was already kind of work in progress a couple of months ago, or is this something very specific that’s changed in the past couple of months that you already want to alert us too? Thank you.

William, yes. So maybe on the Dutch mortality, just maybe as a refresher, what we do is we update our long-term mortality expectations based on European mortality. And we do it on a 2-year lags. So what we're reflecting now is there has been basically mortality improvement from 2015 to 2016. I think as you well know actually mortality has gotten a little bit worse in Europe, the flu seasons have increased mortality. So you would expect to see some of that actually come back perhaps in later periods, we continue to update the mortality assumption. In terms of impact on long-term earnings, it's really negligible. This is very long-term business and this is really a fair value liability business for the most part. So it's all taken in a lump sum to the extent that you would see mortality deterioration, you would see that actually come back in earning. So that would maybe improve things as we update in next year and in the year following. In terms of Long-Term Care, you're absolutely right. What we had seen in the experience for the -- let's say for the full year morbidity and claims experience, that was pretty much exactly in line with our management best estimate. It was a little bit -- so that was I think very good news. We do our normal updates in the second quarter for the US, so that will continue as we always do look at all of our major assumptions to update. But I think one important one is, so for the morbidity improvement we assume this 1.5% improvement per year for the next sort of 10 years. There had been a study that was being conducted by the NAIC in conjunction with the Society of Actuaries. This has been announced, I…

Thank you. Our next question comes from Dave Motemaden from Evercore. Please go ahead. Your line is open.

Hi, thanks. Firstly, a question, you had mentioned -- or I guess firstly a question on LTC, you had mentioned experience was in line with your best estimate assumptions for the full year. Just wondering how that looked on a statutory basis? Because I know last year there were some moving pieces especially on the claim reserve. So just wondering how that looked? Secondly, just in terms of the uses of capital after the dividend. Have you given any thought to transferring or looking at rich transfer of Long-Term Care -- of your Long-Term Care book, I guess what are the chances that you think this could occur, is it something you guys are looking at? And then finally, just on the morbidity improvement assumption, if you could give just sensitivity around removing that, now that you've changed some of the assumptions in your PDR testing, that would be great? Thanks.

Okay. So on the Long-Term Care, maybe good -- yes you mentioned what has happened on a statutory basis. At this point the premium deficiency reserve testing has resulted in about $700 billion sufficiency on that basis. What we have done is we have -- there was some prudency that was embedded within the premium deficiency reserve test, we had haircut that 1.5% morbidity improvement assumption, we had haircut it that down to 1%. And now we have removed that prudency. So effectively we have created -- we have some -- created some gap in the premium deficiency reserve testing by going up to the full 1.5%. In terms of uses of capital after dividend and risk transfer of Long-Term Care books, very difficult to do I would say. It's actually better for us to manage the book as we have been doing. So I think you’ve realized that there have been quite some benefits from putting through premium rate increases. And also you saw historically we had taken the advantage of locking in some long-term interest rates using forward starting swaps. So that needs to be our strategy going forward. It's unlikely that we could do some kind of a risk transfer on the Long-Term Care book. In terms of the sensitivity, I think what we had said before was that if we remove the premium -- or I'm sorry, if we had removed the morbidity improvement assumption, in total, you would see an IFRS impact of around 700 million. And I think it was the same thing around the statutory basis. And I think it holds today, but I want to come back and confirm it with you.

Got it. Thanks. And then just I guess just statutory experience on Long-Term Care for the year. How does that look?

I don't have an update on that one. I think we can get back to you on that one.

Thank you. Our next question comes from Johnny Vo from Goldman Sachs. Please go ahead. Your line is open.

Hey, good morning guys. Just a couple of questions. Just coming back to the leverage ratio, you spoke about the actions you're taking, potentially the growth in shareholders’ equity or retained earnings and also debt reduction. Could you give us a breakout or more clarity on how much you propose to actually reduce debt gross leverage as opposed to growing the book value? That's the first question. The second question is just related to Cofunds. There's been quite a lot of transfers out of Cofunds, how much are you capturing on your own Aegon platform of those transfers out? Because I think the growth in funds offloads into Aegon platform, doesn't quite correlate with the transfers out from Cofunds? And the final question is just a question on the US reserves. What is the realized vol assumption on your US statutory reserves? Thanks.

Okay. So I’ll take the first one. We're not giving any guidance on the amounts of debt or hybrids that we are taking out to the market. We just give the general guidance that we'd like to reduce the leverage ratio over time. There is a certain amount of -- so I mentioned that retained earnings, we -- the fact that we do retain earnings, it does get you to the lower end. We have to think about maybe a little bit of further deleveraging, but we don't need to get there. We don't need to do it in order to get down to the lower end in the medium term let's say. You had asked about, what is the realized vol assumption in US at? That is, -- that's our -- I can give you the -- how do you want to say it, I think what you're asking is, what is the movement of statutory reserves and how has that affected by implied vol? But I think the larger point here is that and I think you're referring really to the hedging results for the half year. We showed this pretty significant, we say, hedging loss on an IFRS basis relative to the macro hedge. But a large part of that is actually due to the fact that the IFRS liabilities are held on an SOP-03-01 basis. And it's like a huge amount. I think the number that we reported for the overall macro loss was something like 468 million. Basically, all of that was the IFRS -- basically the movement in IFRS, SOP-03-01 reserves and DAC, and we only had a 30 million payoff I think from the macro hedge. And that's the point that we tried to make in the presentation, that what matters is the payoff on that macro hedge. And in this case, we were 96 million short, as a consequence of implied volatility not coming through the way that it ordinarily would when you see a sharp market decline.

Okay, that’s clear.

Johnny, let me take the question on the Cofunds outflows. So on Cofunds, we have both, retail customers and institutional customers. And as you can imagine, the institution customer is business that strains a few basis points, and what we've seen in the second half of the year is that a few of the very large institutional customers have taken some of their assets away because they want to spread their supplier dependency, so effectively taken some away. But for a earnings point of view, it’s a very limited impact because it's very low basis points. What I think is important to note is that we have seen actually better retention than we were expecting on our retail side of the business, which is really as much higher returns for us, much higher basis points on assets. And therefore that is the area we will continue to focus most on growing our retail part of the business while maintaining a scalable institutional business.

Thank you. Our next question comes from Andrew Baker from the Citi. Please go ahead. Your line is open.

Hi, thank you for taking my question. So three questions. The first one on just on the US retirement business again. So I know you're still seeing higher flows, at the same time you're investing in service levels to support future growth. But can you just comment on the current service levels and if there’s anything we should be thinking about concerned about there as it relates to the outflows that you're currently saying? Second is on the ROE target, so the new ROE target is greater than 10% on the new definition I believe which is -- which compares to 10% target on the old definition for the old target. So how do you think about how those two reconcile and is it actually a step down in the ROE target here? And if so what really drove that? And third, I saw you had a -- just on unclaimed property as well as a small increase in provision in the US. Is there anything we should be thinking about sort of why there are industry concerns around unclaimed property just because I haven’t seen it come up for a couple years now? Thank you.

Let me take the first part of the question. What we have seen is that we needed to make some investments, further investments in particular in our engagement with the planned sponsors and a lot of our resources actually was being devoted to execute on the Mercer integration, so we had integrated the Mercer customers that we acquired. And it's clear that in that period of time our focus on the IT technology was to get that done and we now need to catch up in providing an improving service levels. It's an ongoing movement. It's like a train that keeps on going. So it's really about further increasing and making sure that our service levels are providing us a competitive position. The second thing we're doing in the retirement business and this is where we have a unique offering is that we have a combined retirement offering and a supplemental health benefit in the same environment and that makes us unique. What we also want to focus on is deepen the scope of our Managed Advice, not only for people that are retiring, but also for people that are in plan. So these are all steps we're taking to take our service levels to the level where it needs to be and to make sure that we are at the front of it and the Mercer acquisition now being behind we are able to dedicate all our resources there. In terms of return on equity target, I think it's important to note also, it was mentioned the context of leveraging or deleverage, potentially deleveraging is that we had a significant amount of returned earnings which affect our return on equity going forward. So we wanted to make sure that we had a target that is more like a minimum target. So we're not saying that we target 10%. we say we need to have at least 10% taken to count the fact that half of our earnings effectively retained and the other half is paid out in the form of dividends. And in terms of the unclaimed property, Matt is there anything you would like to add there?

Yes, I can take that one. There's actually a -- and think of it as a third-party administrator that is working with states to basically compare their records with what's called the Social Security Death Master File, basically to identify people that have passed away and understanding through the through our own data, if claims haven't been filed and we can't find the find a beneficiary, we reach a settlement with the states to put them into what's called a sheet. So basically, we are -- these are contracts for which we were holding a liability, an IFRS liability, but due to the fact that they have passed away and we have made this arrangement with the third-party administrator acting on behalf of the states, then we're effectively accelerating the death claim payment and paying and paying the state. And that's where the 32 million comes in. It relates to life insurance claims, not payouts -- not pay pensioner, or a payout annuity benefits. We have liabilities already on the books for this. So you can think of it as an acceleration of the death benefit payment to people that have passed away and we didn't know it.

We will now take our last question from Steven Haywood from HSBC. Please go ahead, sir. Your line is open.

Thank you pretty much. Just wondered if you can give me an update on the progress you are seeing on refinancing your grandfathered debt instruments. How is that progressing? What further things need to be done and whether there's optionality to rather than refinance to redeem in the future as well. And then I remember your FCC target was around 6% to 8%. Is this still in place? And can you give me an updated FCC ratio at the moment? And finally, on Vivat, is that still a file in focus for you? And is it a file in focus in the whole or in part, I mean would it be interesting to you as a whole business or in just parts of the business?

With respect to the refinancing, so maybe just to review, we have about 2 billion of restricted Tier 1 that needs to be refinanced but we're really in no rush to do so. This had been grandfathered securities at the implementation of Solvency II in 2016. So these are these are grandfathered for a period of 10 years. So we don't feel like we're in a rush. We have all the work done to go to issue into the markets, there's no restriction or anything on us doing so. But we want to make sure that we hit the markets in the right time. So basically, we're just trying to find a good spot in the markets to minimize our costs. And like I said, there's no real rush to do it. But we'd like to get an issuance within -- I think the first one within this year given good market circumstances. On the second one, we're puzzling a little bit as to the FCC ratio, we don't know what that one is. So you can maybe clarify that in a moment, but in the meantime maybe Alex can talk about Vivat.

Sure. So we have expressed an interest in looking at the Vivat, because Vivat is an existing opportunity in our key home markets. So it goes without saying that we should have a look at it. In terms of how we would look, what parts we would look at it, at this point in time, the only thing, I would like to say is that. We should be looking at all options. And it's really early in the process now, I think information members actually has just going out 10 days ago. So we'll see how that whole transaction is progressing. We'll have a look at it. But I want to remind all of you that there is no need from a strategic point of view. We have significant scale in the Netherlands. But if it makes sense from a commercial point and a financial point of view, if we increase scale in certain areas that are of interest, then we should certainly look at it. Do we know in the meantime what FCC means?

Alright, FCC is the fixed charge coverage.

Oh! Fixed charge coverage, alright. So tell me why your question was with respect to that one?

Yes, is the target range still 6 to 8 times and where are you currently?

I have to get the number, I don't have it in front of me but I think it's about 8 times and there's no change to the target.

Thank you. There are no further questions in the phone queue at this time. I would like to hand the call over back to you Mr. Weidema for any additional closing remark.

Well, thank you for listening in for what is a slightly longer than usual. And I look forward to seeing some of you this evening in London. Have a great day. Bye, bye.

This will conclude today's conference call. Thank you all for your participation. You may now disconnect.