Update on lifers: Initiate coverage of dollar-denominated snr bonds with MW

Research evidence excerpt

Update on lifers: Initiate coverage of dollar-denominated snr bonds with MW

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Japan Credit (Insurance)

Update on lifers: Initiate coverage of

dollar-denominated snr bonds with MW

Credit Analysis

10 July 2026

New trends Credit

Since we published our previous report in March, there have not been any new hybrid Japan

bonds issued by life insurers. Issuance has stalled since Sumitomo Life's foreign Insurance

currency-denominated bonds in September last year and Nippon Life's yen-denominated

bonds in July 2024. A major reason is that the insurers finished their preparations early YusukeResearchIkedaAnalyst

for complying with the new solvency rule that took effect at end-March this year. BofAS Japan

+81 3 6225 7712

However, Nippon Life priced its first dollar-denominated senior bonds in March this year, yusuke.ikeda@bofa.com

resulting in a new asset class for life insurers.

Nippon Life’s dollar-denominated senior bonds

We analyze the valuations of Nippon Life's dollar-denominated senior bonds from three

perspectives: 1) megabanks’ TLAC-eligible senior bonds, 2) megabanks’ OpCo senior

bonds, and 3) dollar-denominated IG insurance senior bonds. We use 1) as a reference

for the spread's upper limit, 2) as a reference for the spread's lower limit, and 3) as a

check to ensure valuations are not significantly out of line within the sector.

Life insurers’ dollar-denominated hybrid bonds

We use Nippon Life bonds, which have a well-formed spread curve and the largest

outstanding balance, as the benchmark for evaluating Japanese life insurers' dollar-

denominated hybrid bonds. We compare their valuations with those of hybrid bonds

from European, US, and Asian insurers while also using the spread difference with