Nippon Life can exchange surplus notes for common stock after five years

Nippon Life Insurance has signed an agreement with Prudential Financial to purchase a $500m 10-year exchangeable surplus note issued by The Prudential Insurance Company of America.

Under the terms of the transaction, Nippon Life can exchange the surplus note for shares of Prudential common stock at any time, at Nippon Life’s option, beginning on the fifth anniversary of issuance of the note.

Ikuo Uno, chairman of Nippon Life Insurance, said: “This investment is a reflection of the longstanding relationship, based on mutual respect and admiration, between our two companies. We are very pleased to have the opportunity to strengthen our relationship with Prudential, which shares our values and belief in providing the highest quality products and services to customers in Japan, the United States and around the world.”

John Strangfeld, chairman and CEO of Prudential Financial, said: “We are pleased that Nippon Life has chosen to invest in Prudential. We view this investment as a mutually beneficial partnership. Our two companies will continue to seek opportunities to work together and to promote the well-being of the life insurance industry around the world.”

Barclays Capital served as financial advisor to Prudential on this transaction, which is expected to close on September 18, 2009.