S&P Global Ratings has assigned a ‘BBB+’ long-term issue rating to a tier 2 subordinated corporate bond proposed by Fubon Life Singapore Pte. Ltd. The rating is underpinned by an unconditional and irrevocable subordinated guarantee from its parent company, Fubon Life Insurance Co. Ltd., based in Taiwan.
The guarantee ensures that Fubon Life will cover principal and interest payments if Fubon Life Singapore cannot meet its obligations. This assurance aligns the bond’s rating with other subordinated obligations issued by Fubon Life. The bond, which qualifies as tier 2 regulatory capital, will be consolidated under the parent company’s balance sheet, with no significant impact on Fubon Life’s financial structure.
The bond has a maturity of 10.25 years, featuring a call option after the 10th anniversary within a three-month window before maturity. Notably, the issuance lacks step-up or interest deferral terms. The proceeds are intended to bolster Fubon Life’s regulatory capital adequacy ratio. Any significant changes to the bond’s terms or amount could influence the rating.
This development highlights Fubon Life’s strategic financial management and commitment to maintaining robust capital adequacy, ensuring stability and confidence among investors.
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