2,324.91 16.45 (+0.71%)

    821.82 5.09 (-0.62%)
  • Dollar/Won

    1,115.30 0.00 (0.00%)
증권시황 정보 열기
Home > Market

Hanwha Life issues $1bn perpetual bonds at 4.70% coupon

2018.04.17 15:37:30 | 2018.04.17 15:50:51
  • print
  • email
  • facebook
  • twitter
  • share
South Korea’s Hanwha Life Insurance Co. has raised $1 billion on Tuesday in perpetual bonds at a coupon of 4.70 percent, 200 basis points over the five-year U.S. treasury yield of 2.70 percent.

It is the second largest Korean perp after Woori Bank’s dollar-denominated issue in 2007, and the largest offering from the country so far this year. The life insurer said its debt drew overwhelming demand from 73 institutional investors during the book-building session. Perps usually pay higher than normal debt yields.

Hanwha Life held road shows in the Americas, Europe and South East Asia from last week and met 65 global institutional investors. The company said the issue would enhance the image of not only Hanwha Life but also Hanwha Group as a whole. Foreign investors showed a voracious appetite for the debts as they yield high returns by one of the major life insurers in Korea boasting high creditworthiness.

Perp, which unlike traditional debt is unredeemable, has been popular among insurers as means for increasing capital ahead of new capital guidelines since they fall under equity capital category and not as debt, and therefore does not hurt balance sheet.

The company said the proceeds will be used to bolster capital ahead of the introduction of IFRS17, new accounting rules for insurers that will take effect in 2021. Last year, it also raised 500 billion won ($468 million) through the sale of hybrid securities. “We will put our all-out efforts to maintain the financial soundness,” the company added.

The bonds have a 30-year maturity but are deemed perpetual as the issuer can push back the maturity. Hanwha Life expects the debt issuance would raise its risk-based capital (RBC), the minimum capital financial institutions must hold to protect investors and clients, from 206 percent as of the end of last year to more than 230 percent this year.

Shares of Hanwha Life Insurance closed Tuesday at 6,110 won, down 0.97 percent from the previous session.

By Noh Seung-hwan and Choi Mira

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]



  • Seoul Tue 25 September 2018
  • TUE


Get Newsletters