PICC Property & Casualty to Sell CNY8bn Subordinated Bonds

PICC Property & Casualty Co., Ltd. (SEHK: 2328), a top insurance company in China, May 31 posted an announcement on the Stock Exchange of Hong Kong that it has won an approval from the board of directors to sell not more than CNY 8 billion 10-year subordinated bonds.

The Hong Kong traded insurer states that it will use the capital raised from the offering to replenish solvency. The company saw solvency adequacy ratio stand at 111 percent as of last year end in terms of its 2009 results.

The China Insurance Regulatory Commission requires that a normal insurer should keep the adequacy ratio at above 150 percent.

The issuance of subordinated bonds is the most appropriate way to raise capital while interest rates remain low currently after mulling over different programs, according to the announcement.

Data show that PICC Property & Casualty raked in a premium income of CNY 54.2 billion in the first four months this year, expanding by 24 percent from a year earlier.