Kyobo Life Insurance Issues 500 Million Dollar Perpetual Capital Securities

[Asia Economy Reporter Changhwan Lee] Kyobo Life Insurance announced on the 10th that it will issue $500 million worth of hybrid capital securities.

The company explained that this issuance of hybrid capital securities is a proactive measure to prepare for the implementation of IFRS17 and K-ICS scheduled for next year.

Kyobo Life Insurance's RBC (Risk-Based Capital) ratio stood at 205.1% as of the end of March this year, maintaining stable capital adequacy. However, this move is interpreted as an effort to prepare for risk factors such as changes in the financial environment through proactive capital management.

The total issuance amount of the hybrid capital securities is $500 million (approximately 625 billion KRW), and it will be issued entirely overseas with a coupon rate of 5.9%. Kyobo Life chose overseas issuance because, based on its top-tier international credit ratings in the financial sector, it can issue under favorable conditions in the global market.

Thanks to its excellent profitability and capital adequacy, Kyobo Life has maintained an 'A1' credit rating from Moody's for seven consecutive years and an 'A+' rating from Fitch for nine consecutive years, both among the world's top three credit rating agencies. Based on this, it successfully issued $500 million worth of hybrid capital securities in the overseas market in 2017.

During the pricing (bookbuilding) held on the 8th, leading overseas bond investment institutions participated. Despite challenging capital market conditions due to rising domestic and international interest rates and increased volatility, demand reached $3.6 billion, about seven times the planned issuance amount, reaffirming Kyobo Life's strong creditworthiness.

Considering the importance of ESG (Environmental, Social, and Governance), this hybrid capital security will be issued in the form of a Sustainability Bond, one of the ESG bonds. The funds raised will be used for projects aimed at environmental friendliness and creating social value.

Although the maturity of this hybrid capital security is 30 years, early redemption (call option) is possible after five years.

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