Insurance company subordinated debt refers to bonds issued by insurance companies. Liquidation of principal and interest is behind the other liabilities and before the equity capital of the insurance companies.
Insurance company subordinated debt is one kind of financial bonds. Offering period and type of bond can be flexibly designed according to the financing needs of issuers.
Insurance companies established in China (excluding Hong Kong, Macau and Taiwan) need to raise capital.
Functions and Features
Insurance company subordinated debt is mainly used to supplement capital funds to better guard against risks.
1. Strong underwriting: ICBC is a Class A bond underwriting member under the Ministry of Finance, Class I trader of People's Bank of China's open market, the earliest commercial bank in China to be qualified for the underwriting of non-financial corporate debt instruments. For years ICBC has been named excellent underwriter and excellent trader by the Ministry of Finance and People's Bank of China.
2. Rich experience: ICBC has a team of professional staff experienced in bond underwriting, and a comprehensive, effective internal mechanism in place for customer service, credit risk assessment and underwriting execution.
3. Good relationship: ICBC maintains good contact with regulatory authority and good relationship with the investors. ICBC is able to underwrite the financial bonds issued by commercial banks.
Offering interest rates for the financial bonds issued by commercial banks depend on the term, credit rating of the customers and market conditions, referencing market price and opinions of regulatory authority.
Service Channel and Hours
Insurance companies are welcomed to contact ICBC directly during office hours, based on own financial requirements.
1. Verify: Customers must supply application documentation to ICBC required by the regulatory authority. ICBC will proceed due diligence, assess credit risk and sign relevant agreements with customers.
2. Approval: ICBC sends the application documentation to China Banking Regulatory Commission and People’s Bank of China for approval.
3. Issuance: Once approved by China Banking Regulatory Commission, ICBC will proceed to issue the bonds.
Since 2010, ICBC has successfully underwritten RMB 2 billion of subordinated debt for Sunshine Life Insurance. Besides, ICBC also underwrote RMB 5 billion of subordinated debt for People's Insurance Company in 2011.