China Life To Raise $2 Billion by Issuing Bonds

In accordance with a preliminary term sheet seen by sources on August 7, China Life Insurance (Overseas) Hong Kong has mandated banks for its 10-year subordinated bond offering. According to people with direct knowledge of the situation, the Hong Kong arm of China's second-largest insurer by assets is looking to raise between $1 billion and $2 billion.

One of the sources confirmed that the price has not changed and that the offering will most likely be launched later in the day. According to the term sheet, the bond will be rated A- by S&P Global and will be callable, giving the issuer the right to redeem after five years.

Sources told in mid-July that the insurer was in talks with investors about pricing it at 120 basis points (bps) to 130 bps above five-year U.S. Treasuries, or a yield of 5.25 percent to 5.5 percent. According to the term sheet, it will be priced as early as August 8.

China Life last used the bond market in March 2019, when it issued 35 billion yuan in China's interbank bond market. The company had no outstanding dollar debt as of its 2022 annual report, despite reporting 327.2 billion yuan ($45.7 billion) in premium income in the first quarter.