Source: Bloomberg
Taiwan's Life Insurance Company is issuing unprecedented number of secondary bonds because they are eager to improve their financial status before the last term to enrich capital, which brings more potential risks to investors.
According to Bloomberg's data, from 2024, seven major insurance companies in Taiwan have sold US $ 2.4 billion (S $ 3.2 billion) of sub -level bonds, which will record the highest record in the same period in the first half of the year.Judging from the announcement of the insurance company, the number of NT $ 158 billion (S $ 6.6 billion) has reached a record of NT $ 158 billion.The secondary debt means that once the issuing agency goes bankrupt, the holder of the sub -debt has lagged behind other debt holders in terms of asset requirements.
Before the new accounting system was in line in 2026, Taiwan Life Insurance Company will work hard to accumulate capital to meet higher financial standards. Therefore, long -term secondary bonds have become a favored funding channel.In April last year, the insurance company was allowed to issue such bonds with a term of more than 10 years.Most of the debt is denominated by Taiwan dollars, and some of which are denominated in the US dollar.
"We expect Taiwan Insurance Company to continue to issue secondary debt to increase its capital adequacy ratio, and the circulation in 2024 and 2025 may remain at a high level." While Wetu International Evaluation Co., Ltd.Senior Director Terrence Wong said.
Facts have proved that life insurance secondary bonds are very popular with investors because their yields are generally higher than long -term low -yield products in Taiwan's fixed income market.Buyers include traditional investors such as government funds and financial institutions, as well as non -financial companies and high -asset customers who have rarely invested life insurance bonds in the past.
Optical interest rate
The annual yield of 10 -year bonds issued by Cathay Life is 3.7%, which is about two percentage points higher than the government bond interest rate of the same year limit.
"The yield rate of these bonds is indeed very attractive, because the yield rate of fixed income products denominated by Taiwan dollar is rarely exceeded 3%." Tommy Gu said "Life Insurance Company alsoIt may face a certain pressure, and you need to use a higher yield to ensure your energy. "
"According to exchange documents, non -financial companies investing in sublime debt include laptop computer manufacturers Acer Co., Ltd. and Biomedical Company Changsheng International Biotechnology Co., Ltd.
Although the Treasury debt is widely favored by the market, the liquidity of the subprime bonds issued by the local currency is relatively weak, which is one of the potential risks.
Zhang Shulai, senior deputy general manager of the China Credit Evaluation Financial Services Evaluation Department, said that most of the bond holders in Taiwan tend to buy and hold.At the same time, he believes that the situation similar to the additional level of capital (AT1) bonds is "completely reduced", and it is unlikely that most local banks have relatively strong capital strength.
