China Life mandates banks for up to US$2 billion bond offering

CHINA Life Insurance (Overseas) Hong Kong has mandated banks for its 10-year subordinated bond offering, according to a preliminary term sheet seen by Reuters on Monday (Aug 7).

The Hong Kong arm of China’s second-biggest insurer by assets is looking to raise between US$1 billion and US$2 billion, people with direct knowledge of the matter have previously said.

One of the people confirmed that the amount has not changed and that the offering is likely to be launched later in day.

China Life did not respond to an email from Reuters seeking comment on the deal.

The bond is expected to be rated A- by S&P Global, and will be callable, giving the issuer the right to redeem after five years, according to the term sheet.

In mid-July, the insurer was sounding out investors about pricing it at 120 basis points (bps) to 130 bps above five-year US Treasuries, or a yield of 5.25 per cent to 5.5 per cent, sources told Reuters at the time.

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It will be priced as early as Tuesday, according to the term sheet.

The last time China Life tapped the bond market was in March 2019, when it issued 35 billion yuan’s worth in China’s interbank bond market.

The company, which reported 327.2 billion yuan (S$61 billion) premium income in the first quarter had no outstanding US dollar debt as of its 2022 annual report. REUTERS