China's Beijing Regulator Approves Capital Bond Issuance for Great Wall Life and Beijing Life

China's Beijing Financial Regulatory Bureau has approved Great Wall Life Insurance's 3.5 billion yuan 10-year callable capital supplementary bond and Beijing Life Insurance's 600 million yuan perpetual capital bond, according to Jiemian News. Jiemian News reported that nearly 20 insurers have been approved for or completed capital supplementary bond issuance so far this year, with total issuance exceeding 60 billion yuan and perpetual bonds accounting for almost 70%. The report said the insurance sector issued 16 capital supplementary bonds and perpetual bonds in the first half, totaling 32.07 billion yuan, of which perpetual bonds made up 19.34 billion yuan. It added that People's Insurance Company of China Life Insurance received approval in July to issue 10 billion yuan of perpetual bonds, New China Life completed a 10 billion yuan perpetual bond sale in July at a first-five-year coupon of 1.90%, China CITIC Prudential Life issued 9 billion yuan in two tranches this year, and Sunshine Life issued 5 billion yuan of capital supplementary bonds. Jiemian News also cited analysts and industry participants as saying bond issuance is faster than equity injections, does not dilute existing shareholders, and has become the main capital-raising tool for insurers as capital constraints rise under China's second-phase solvency rules. It said issuance costs have fallen as rates declined, with New China Life's July perpetual bond priced at 1.90% and People's Insurance Company of China Life Insurance's August perpetual bond priced at 1.88%, while Great Wall Life's newly approved 3.5 billion yuan quota is widely expected to come at a lower rate than its February 2.54% bond.