Insurers take lead role from banks in issuances of subordinated debt

Ahead of the game

While banking institutions remain caught in a web of uncertainty over Basel III banking regulations, insurance companies are pushing forward by issuing numerous hybrid debt deals. Hybrid debt, with characteristics of both debt and equity, is naturally subordinated and was, pre-crisis, considered a convenient means of boosting banking institutions’ regulatory capital.

However, as the crisis deepened, banks proved reluctant to see such bonds hit. Now, with regulators looking to tighten the require