Star Union Dai-ichi Life raises Rs 125cr via bonds

Mumbai:

Star Union Dai-ichi

Life Insurance, a joint venture between two government-run banks and a Japanese

life insurance

major, on Tuesday said it has raised Rs 125 crore through its maiden domestic bond offering. The amount raised will mostly be used to fund growth of its business.

The life insurer raised funds by issuing 10-year subordinated debt securities, which had a ‘AA’ rating and a stable outlook from ICRA. The funds were raised at a yield of 7.75% per annum, its officials said.

Ratings company ICRA said that the assigned rating takes into account Star Union Dai-ichi Life Insurance’s “strong promoter profile, which enables capital, strategic, and operational support as and when required”. The company is a joint venture between Bank of India, which holds 28.96% stake,

Union Bank of India

holds 25.10% stake and Dai-ichi Life International Holdings owns the balance 45.94% stake.

The importance of Star Union Dai-ichi Life to the promoters is demonstrated by their track record of equity infusion and their continued capital commitment. The rating also factors in the operational support in terms of access to the extensive branch network of about 14,300 of the promoter banks, ICRA said. “In terms of strategic support, the company leverages the vast experience of Dai-ichi Life in the life

insurance

industry for new product approval and reinsurance arrangements, among others,” it said.