Linklaters advises on China Life’s Core Tier 2 Capital Securities - first ever Chinese insurer to market new-style capital instruments

Linklaters is advising on China Life Insurance Company Limited’s Core Tier 2 Capital Securities – the first ever international offering of capital securities that comply with new Chinese regulations intended to strengthen the  insurance sector. The offering also represents the largest ever international fixed income issuance by a PRC insurer.  

The PRC's largest insurer is selling US$1.28 billion Core Tier 2 Capital Securities, which will yield 4% and are expected to be rated A3 (Moody's) / A (S&P) / A- (Fitch). The Capital Securities will have an initial 60 year team extendible by the issuer and a non-call period of 5 years.  

William Liu, Capital Markets partner at Linklaters, says: “The deal represents a paradigm shift for China. Typically, we see companies test a new regime domestically before putting it under the international spotlight, but this instance shows just how much confidence there is in the robustness of the new model.”  

Terence Lau, managing associate at Linklaters, added “We are extremely proud to be the legal architects of an instrument that sets the template for the recapitalisation of China’s insurance sector, most significantly with foreign capital.” 

BNP PARIBAS, BofA Merrill Lynch, CICC HK Securities, Citi, Goldman Sachs (Asia) L.L.C. and HSBC are the joint lead managers and joint bookrunners.

The Linklaters team advising on this transaction is led by Capital Markets partner William Liu and managing associate Terence Lau.