Hedging Costs at ’09 High Drive Korea Insurers to Local Debt

  • ‘Difficult’ to invest in dollar debt due to cost: DB Financial
  • Insurer demand for longer local bonds pressures long yields

South Korean insurers are increasingly looking at long-dated bonds at home as rising hedging costs hurt their appetite for foreign assets, putting downward pressure on lengthier won debt yields.

Shinhan Life Insurance Co. has been buying long debt at home as much as possible while reducing U.S. dollar exposure due to high hedging costs, said an official at the firm who asked not to be identified. Insurers bought all 30 billion won ($28 million) of 30-year note issued by state-owned Korea South-East Power Co. this month, a person familiar with the matter said…
Categories : Hedge Funds

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