Fubon Life Insurance Co (富邦人壽) plans to issue NT$50 billion (US$1.54 billion) of subordinated corporate bonds — on top of the NT$25 billion it issued in the first half of the year — to bolster its financial strength, parent company Fubon Financial Holding Co (富邦金控) said in a regulatory filing yesterday.
The subordinated bonds, with a maturity date of 10 years or longer, would be issued in one or several tranches within one year through public offerings, the filing said.
Fubon Life and its local peers have been gearing up to issue new debt to strengthen their financial structure and increase their risk-based capital ratio, as Taiwan’s insurance sector is to adopt the International Financial Reporting Standard 17 (IFRS 17) and the new Insurance Capital Standard framework in 2026.
Photo: Kelson Wang, Taipei Times
A subordinated bond is a type of debt that ranks lower in priority, with respect to claims on assets in case of bankruptcy or liquidation.
Long-term subordinated bonds have increasingly become a favored channel for life insurers to raise funds, as they are popular among investors in the Taiwanese fixed-income market, given their relatively higher yields.
Fubon Life’s board has authorized the company’s chairman or any designated person to decide the coupon rate of the new offering depending on market conditions, the filing said.
Earlier this year, Fubon Life sold NT$14.88 billion of 10-year subordinated bonds with a coupon rate of 3.7 percent, and NT$10.12 billion of 15-year bonds with a coupon rate of 3.85 percent, Taipei Exchange data showed.
In April, Cathay Life Insurance Co (國泰人壽), the nation’s largest insurer, also announced that it would issue up to NT$50 billion in subordinated bonds, offering 3.7 percent for 10-year debt and 3.85 percent for 15-year debt, exchange data showed.
So far this year, six life insurers — which also include Nan Shan Life Insurance Co (南山人壽), KGI Life Insurance Co (凱基人壽), Shin Kong Life Insurance Co (新光人壽) and Mercuries Life Insurance Co (三商美邦人壽) — have announced plans to issue subordinated bonds to raise funds.
The sector sold a record-high NT$111 billion in subordinated debt last year, data compiled by the Financial Supervisory Commission showed.
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
TARIFF CONCERNS: Semiconductor suppliers are tempering expectations for the traditionally strong third quarter, citing US tariff uncertainty and a stronger NT dollar Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar. Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter. The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then
AI SERVER DEMAND: ‘Overall industry demand continues to outpace supply and we are expanding capacity to meet it,’ the company’s chief executive officer said Hon Hai Precision Industry Co (鴻海精密) yesterday reported that net profit last quarter rose 27 percent from the same quarter last year on the back of demand for cloud services and high-performance computing products. Net profit surged to NT$44.36 billion (US$1.48 billion) from NT$35.04 billion a year earlier. On a quarterly basis, net profit grew 5 percent from NT$42.1 billion. Earnings per share expanded to NT$3.19 from NT$2.53 a year earlier and NT$3.03 in the first quarter. However, a sharp appreciation of the New Taiwan dollar since early May has weighed on the company’s performance, Hon Hai chief financial officer David Huang (黃德才)
RSS