Hanwha Life Insurance Company on January 24 priced a US$750 million tier-2 subordinated sustainability securities – the first insurance tier-2 US dollar offering as a sustainability bond by a Korean insurance company.
The Reg S/144A 10-year non-call five-year deal was priced at par with a similar coupon and re-offer yield of 3.379%. This was equivalent to a spread of 185bp over US treasuries, or 15bp tighter than the initial price range in the 200bp area. The coupon is fixed until year five, and reset at year five to a new fixed rate equal to the prevailing five-year US treasury rate, plus the initial spread (185bp) with no step-up. There is no coupon deferral for the securities.
The issuance garnered an order book in excess of US$1.1 billion from 82 accounts with 67% of the bond allocated in Asia, 26% in Europe, the Middle East and Africa, and 7% in the US. By type of investors, asset and fund managers accounted for 62% of the paper; central banks, governments, insurance companies and pension funds 31%; banks 5%; and private banks and other investors 2%.
The proceeds will be used to fund or refinance new or existing eligible green or social projects in accordance with Hanwha Life’s sustainability bond framework. J.P. Morgan acted as the sole global coordinator for the transaction as well as a joint bookrunner and lead manager, along with BofA Securities, Citi and Standard Chartered. Hanwha Investment & Securities was a joint lead manager for the offering.