Samsung Life Announces New USD 30NC5 Tier 2 Subordinated Bond at an IPG of 7.00%

• Samsung Life Insurance Co., Ltd. ("Samsung Life") is South Korea's largest life insurer and a core affiliate of the Samsung Group. The insurer is launching a new USD benchmark-sized 30-year non-call 5-year (30NC5) Tier 2 Subordinated Capital Securities, its first-ever bond issuance, under a board-approved plan to raise up to US$1.5 billion in offshore hybrid capital – which would be the largest such offering by a Korean insurer. Settlement is slated for 2 November 2026, with the first call date on 2 November 2031, and Initial Price Guidance (IPG) has been set at 7.00%.

• The expected issue ratings of A2 (Moody's) / A+ (Fitch) come in two notches below the Issuer's own ratings of Aa3 / AA. This notching reflects the deeply subordinated ranking of these securities, which sit behind all other senior and subordinated creditors, including policyholders and dated subordinated creditors, and only rank ahead of shareholders.

• Consolidated net profit rose 35.8% year-on-year (YoY) to KRW1.9 trillion in 1H2026, ended 30 June 2026, driven by investment profit of KRW1.9 trillion, which was boosted by dividends and income from subsidiaries. Insurance service profit, however, fell 35.9% YoY to KRW533.1 billion, as higher medical claims and a one-off KRW83.0 billion provision for wages and retirement benefits weighed on underwriting results. New business contractual service margin (CSM), a key indicator of future insurance profits, grew 20.4% YoY to KRW1.7 trillion on the back of strong sales of protection-type products such as whole life insurance.

• Momentum slowed in 2Q2026, with net profit for the quarter down 9.1% YoY to KRW689.9 billion on weaker insurance income. The quarter also included one-off CSM adjustments made in line with the Financial Supervisory Service's guidelines, reflecting more conservative actuarial assumptions on new rider loss ratios and expense ratios. On a brighter note, Samsung Life's exclusive agent channel grew by about 2,100 agents year-to-date to close to 45,000 as at end-June 2026, supporting future new business growth.

• Samsung Life’s Korean Insurance Capital Standard (K-ICS) solvency ratio stood at a solid 208% as at end-June 2026, with available capital of KRW129.6 trillion covering required capital of KRW62.2 trillion more than twice over, while its basic capital (Tier 1) K-ICS ratio remained stable at 177% – among the highest in the Korean insurance sector. Samsung Life also holds about 8.5% of Samsung Electronics' common shares, providing a large and growing stream of dividend income that adds to its financial flexibility as it pursues overseas investments, including a reported ~15% stake in US-listed Principal Financial Group.

• Samsung Life's 7.00% IPG offers a pickup of about 205bps over US Treasuries of a similar tenor to its 2031 first call, meaning investors are paid roughly two percentage points a year above a Treasury for taking on Samsung Life's subordinated credit risk. As the coupon resets to the 5-year Treasury plus the initial spread in 2031, this spread, set at pricing, is also what investors would lock in beyond the first call should the bond not be redeemed.

• Compared to similar USD subordinated bonds from global life insurers, Samsung Life's IPG provides a pickup of about 53 bps over HLINSU 6.300% 24Jun2055 Corp (USD), which trades at 6.47% (173bps over Treasuries) with 3.7 years to call, despite Samsung Life's stronger A2/A+ issue ratings versus Hanwha Life's A3/A-. ANGINC 7.000% 01Dec2055 Corp (USD) offers a higher 8.47% (352bps over Treasuries) with 4.1 years to call, about 147bps above Samsung Life, but this premium reflects its sub-investment grade BB+/BB+ ratings and lower ranking, as the bond is ranked junior subordinated.

• Therefore, we view the Samsung Life new issue as attractively priced at the IPG of 7.00%. Investors should note that this is the initial price guidance, which is subject to change when the final price guidance (FPG) is set, and pricing could tighten if demand is strong. Investors should also stay mindful of the risks that come with the structure – the securities rank behind policyholders and all other creditors, coupons can be cancelled on a non-cumulative basis, and the bond may not be called in 2031.

Table 1: Peer Comparison

Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds NIL positions. The analyst who produced this report hold NIL positions in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.