China Life Insurance, bankers in the talks of $2b bond

It plans to issue a 10-year tier-2 bond.

China Life Insurance is said to be in talks with bankers to issue a 10-year tier-2 bond, aiming to raise between $1b and $2b, Reuters reported.

The insurer, China's second-largest by assets, has invited banks to serve as global book-runners for the bond issuance. 

READ MORE: China Life Insurance mulls up to $2 billion bond - sources

The targeted pricing range for the bond is set at 120 to 130 basis points above the five-year US Treasuries, equivalent to a yield of 5.25% to 5.5%. 

The terms, including the potential call option after five years, may be subject to change when initial price guidance is provided, expected as early as next week. 

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China Life's last bond issuance was in the Chinese interbank bond market in March 2019. The company has no outstanding dollar debt as per its 2022 annual report.

Many Chinese state-owned companies pivoted to the onshore yuan market for funding caused by higher dollar interest rates, as the five-year Treasury was quoted at 3.97% on Friday, compared to a Chinese government bond of the same maturity at 2.44%, bankers said.