Kyobo Securities is stepping in to support group-level capital expansion by buying hybrid securities issued by affiliate Kyobo Life Insurance.
Kyobo Securities said in a regulatory filing on the 18th that it had resolved to purchase 40 billion won of a planned 300 billion won issue of "7th Series Bearer Interest-Bearing Unsecured Hybrid Securities" by Kyobo Life.
The hybrid securities carry a maturity of 30 years from the date of issuance. Both the scheduled issuance date and Kyobo Securities' scheduled purchase date fall on the 31st of this month. The coupon rate and yield will be finalized based on the results of demand forecasting conducted among institutional investors.
Kyobo Life plans to increase the issuance size to as much as 500 billion won depending on the demand forecast, which could in turn expand the size of Kyobo Securities' purchase.
The issuance comes as Kyobo Life faces mounting funding pressure following a series of recent stakes acquisitions in subsidiaries. In April, Kyobo Life acquired a 50%-plus-one-share stake in SBI Savings Bank for 900 billion won. This month, it bought the remaining 50% stake in Kyobo AXA Investment Managers held by BNP Paribas Asset Management Holding for about 107.5 billion won, bringing the firm in as a wholly owned subsidiary.
Further mergers and acquisitions are also possible. Kyobo Life is reported to be pursuing an acquisition of AXA General Insurance. The value of the controlling stake in AXA General Insurance is estimated at up to 300 billion won.
