Korean Reinsurance (Korean Re) successfully issued the country’s first offshore Tier 1 subordinated capital securities in the insurance sector, and has established itself as one of the pioneering few Asian insurers to issue regulatory capital securities.

Korean Re has priced a USD200 million perpetual Tier 1 subordinated capital securities at the initial guidance of 4.875%. The coupon is 4.5% (Yield 4.6%, price 99.558%). Allen & Overy advised the lead joint-managers, HSBC and J.P. Morgan.

Korean Re was created in 1963 and is today the world’s ninth largest reinsurer and the largest in Asia, according to global insurance focused ratings agency, A.M. Best.

Hong Kong based capital markets partner John Lee commented: “Korean Re’s regulatory capital securities issuance without a doubt confirms a growing interest by Asian insurers in the sphere of international debt capital markets. While regulatory capital deals in Asia have been dominated by bank issuers in Asia, I am hopeful that we will see more regulatory capital deals by other Asian insurers. As this transaction was the first international regulatory capital deal by a Korean insurer, careful attention to regulatory governance and identifying any potential risk was needed.”

Partner John Lee led the Allen & Overy team with support from counsel Abigail Boyd and associates Paul Porter and Julie Song.