bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Ping An Insurance (Group) plans  to sell as much as 26 billion yuan (HK$31.7 billion)  of convertible bonds to provide additional working capital.
 The six-year convertible bonds will carry a coupon rate of no more than 3 per cent. The plan was approved by the company's board and will be voted on at a meeting of shareholders  on February 8.
 'Convertible bonds will satisfy our company's development for a certain period of time. We have no other fund-raising plans so far, including in the H-share market,' said president Ren Huichuan  yesterday.
Ren said  Ping An, the world's second-biggest life insurer by market value, planned to issue the bonds in the third quarter of next year, after it received approval from shareholders and the China Insurance Regulatory Commission (CIRC). 
'With the Chinese financial industry developing very quickly, we need to increase our working capital. This is in line with the industry's development,' he said. 
Ren also said Ping An had no plans for overseas acquisitions. 
In June, the  insurer raised HK$19.5 billion through a private placement in Hong Kong. 
The Shenzhen-based insurer said in August that it would spend as much as 20 billion yuan to increase its stake in Shenzhen Development Bank to 61 per cent from 52 per cent.
Kenneth Yue, senior analyst at CCB International, said the recent weak A-share market was likely behind the bond issue,  rather than the insurer's rapid expansion.
'I don't think many analysts expected this to come up around Christmas,' Yue said. 'Based on the October-end figures they provided, the group's solvency margin ratio was 171 per cent, and life insurance business solvency ratio dropped to 153 per cent.
'Although they did not provide the November figures,  we know that the A-share market did not do very well.  So [it is] very likely the solvency margin ratio of its life business fell below 150 per cent, which is a healthy level under the CIRC regulations.'
The ratio, which measures an insurer's ability to settle claims, may rise to 194.9 per cent if the bonds are all converted into stock.
 Chinese insurers may be subject to dividend payout restrictions when solvency ratios drop below 150 per cent. They may be ordered to submit plans to prevent a fall  below 100 per cent, and the regulator can freeze approvals for new branches, curb management pay and restrict investment.
Yue said the move reflected concern by Ping An about  the coming year and beyond.
'Honestly no one knows what will happen,' he said.  'What Ping An is trying to achieve is to have more money in its pocket to sustain its rapid growth in 2013, because the money [from the bonds]  won't be in their account until possibly the end of 2012.'
Ping An's Hong Kong-listed shares were down 2.65 per cent  yesterday,  underperforming a 1.86 per cent  gain by the benchmark Hang Seng Index.
The company's Shanghai-traded shares fell 5.2 per cent  against the market's decline of  1.12 per cent.



Ping An seeks 26b yuan in bond issue