Kyobo Life to Issue ESG Bonds Worth Up to 500 Billion KRW

[Asia Economy Reporter Oh Hyung-gil] Kyobo Life Insurance announced on the 19th that it will issue up to 500 billion KRW worth of ESG (Environmental, Social, and Governance) hybrid capital securities next month.

Kyobo Life Insurance resolved this at the board meeting held the previous day and has begun the issuance process. The issuance size is expected to be between 300 billion KRW and up to approximately 500 billion KRW.

The purpose is to proactively prepare for capital regulations such as the new solvency regime (K-ICS) to be introduced in 2023. It explained that it will be able to strengthen its core business competitiveness by managing stable capital adequacy and preparing for various risk factors including changes in the financial environment, utilizing the raised funds.

It will be the first life insurance company to issue in the form of ESG bonds. ESG bonds are issued for socially responsible investment purposes such as improving environmental, social, and governance aspects, and Kyobo Life plans to allocate the raised funds to environmental or social sectors to contribute to realizing social value.

Moody's reaffirmed Kyobo Life Insurance's insurance payment capability credit rating as 'A1', the highest grade among domestic financial companies for seven consecutive years, and upgraded the rating outlook to 'stable.' Fitch also maintained the 'A+' rating for nine consecutive years. In addition, three domestic credit rating agencies have also assigned the highest grade 'AAA' to Kyobo Life's insurance payment capability.

Previously, based on its high credit rating, Kyobo Life issued 500 million USD worth of hybrid capital securities in the overseas market in 2017. Early redemption of the hybrid capital securities issued in 2017 will be possible next year, and plans to refinance the hybrid capital securities overseas are also under discussion.

A Kyobo Life Insurance official said, "Based on our high domestic and international credibility, we expect to secure various investors," adding, "Through this hybrid capital securities issuance, we anticipate not only proactively responding to regulatory introduction but also mitigating capital volatility."

This content was produced with the assistance of AI translation services.