Kyobo Life Insurance Company of South Korea on June 8 priced a US$500 million sustainability bond with a 30-year rolling-in-perpetuity non-call five-year tenor. The Reg S/144A offering pays a fixed-rate coupon of 5.90% for the first five years, which was in line with the final price guidance and 40bp tighter than the initial price range of 6.30bp area.

Thereafter, the coupon will reset every five years to the then prevailing five-year US treasury rate, plus initial spread with additional step-up of 100bp in year 10 and onwards. Kyobo Life has the first call option in year five and every distribution payment dates thereafter.

Kyobo Life has a similar maturity – US$500 million 3.95% bond – that is callable in July and the latest offering will refinance that security.

The deal attracted a final order book of US$3.5 billion from 205 accounts with 77% of the bond allocated in Asia, 13% in the US and 10% in Europe, the Middle East and Africa. By type of investors, asset and fund managers accounted for 65% of the paper, with sovereign wealth funds, insurance companies and pension funds 24%, private banks 6% and banks 5%.

The net proceeds will be used to finance or refinance new or existing eligible green or social projects in accordance with Kyobo Life’s sustainability bond framework dated December 2021.

Citi, HSBC, J.P. Morgan and Nomura were the joint bookrunners and lead managers for the offering, while Kyobo Securities acted as the co-manager.

Kyobo Life is among the top three largest life insurance companies in Korea, offering life, savings, retirement pension, accident and health insurance products. As of the end of March 2022, it has total assets of 128.3 trillion won (US$102.15 billion) and shareholders' equity of 9.8 trillion won on a consolidated basis.