Heungkuk Life "Will Exercise Call Option on New Capital Securities"... Market Anxiety Expected to Ease

"With the Purpose of Calming Financial Market Turmoil"

Heungkuk Life Insurance Headquarters. [Image source=Yonhap News]

[Asia Economy Reporter Lim Chun-han] Heungkuk Life Insurance has decided to exercise the call option for the early redemption of its hybrid capital securities ahead of the exercise date (the 9th).

On the 7th, Heungkuk Life Insurance announced in a press release, "We have decided to exercise the call option for the $500 million overseas hybrid capital securities issued in November 2017."

Heungkuk Life Insurance stated, "This decision is to quell the recent financial market turmoil caused by the postponement of early redemption," adding, "Taekwang Group has also decided to support capital expansion to fulfill its social responsibility." It is reported that Heungkuk Life Insurance has been working to secure early redemption funds through repurchase agreement (RP) transactions with major commercial banks. With Heungkuk Life Insurance officially announcing its plan for early redemption of hybrid capital securities, market instability triggered by the non-exercise of the call option is expected to calm down to some extent.

Previously, ahead of the early redemption date of the foreign currency hybrid capital securities on the 9th of this month, Heungkuk Life Insurance postponed the exercise of the call option. Initially, Heungkuk Life Insurance attempted to raise early redemption funds by refinancing $300 million (approximately 420 billion KRW) worth of hybrid capital securities, but funding was disrupted due to deteriorating market conditions. When Heungkuk Life Insurance's decision not to exercise the call option became known, the prices of foreign currency-denominated bonds issued by domestic companies sharply dropped in the global bond market, significantly worsening investor sentiment toward Korean bonds.

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