Shinhan Life announced on the 5th that it has successfully completed the issuance process of subordinated bonds totaling 500 billion won. Shinhan Life stated, "This is a strategic measure to proactively prepare for the redemption of existing 300 billion won hybrid capital securities, which will reach the call option in August," adding, "In the demand forecast conducted on the 27th of last month, we attracted significant attention by focusing a total of 1.2 trillion won from institutional investors."
The issuance conditions feature an interest rate of 3.4%, approximately 0.92 percentage points higher than the government bond yield for five-year bonds suggested by four private bond rating agencies, which was 2.472% as of the 27th of last month. A representative from Shinhan Life explained, "It is about 0.7 percentage points lower in absolute interest rates and approximately 0.4 percentage points lower in terms of spread compared to the previous issuance of insurance company capital securities," and noted, "Even when compared to the interest rates and spreads of the hybrid capital securities recently issued by major banks and financial holding companies, the absolute interest rate is 0.05 percentage points lower and the spread is about 0.01 percentage points lower, making it a very excellent condition."
Shinhan Life is the first to successfully issue subordinated bonds with an interest rate in the 3% range among insurance companies since 2021. Shinhan Life has a solvency margin ratio (KICS), a key soundness indicator, of 189.3%, exceeding the financial authorities' recommended level of 150%. Korea Ratings and Korean Credit Ratings also assessed Shinhan Life as "AA+ (stable)."