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Kyobo Life Insurance plans to raise as much as 500 billion won ($425 million) from its maiden won-denominated hybrid bond sale to improve its financial structure.

Kyobo Life and its bookrunners, KB Securities and Korea Investment & Securities, are preparing to issue a hybrid bond to secure liquidity, industry sources said on Wednesday. The issuer is expected to start a book building process and issue the bond in mid-September.

The issuer has tentatively decided to raise 300 billion won through the issuance. The amount could be increased to 500 billion won if the bond is oversubscribed during the book building process in early September.

This will be the life insurer’s first offering of a hybrid bond, which is regarded as an asset, instead of debt, in financial statements.

Kyobo Life has issued mezzanine debts whenever it needed to secure liquidity and improve the financial structure. In July 2017, the life insurer raised about $500 million in its offering of a foreign currency-denominated hybrid bond. It was the first time a domestic life insurer sold a hybrid bond in the Korean paper market. Korean paper refers to foreign currency debt issued by South Korean entities abroad. The bond was underwritten by Citigroup Global Markets Korea Securities, JP Morgan, Nomura Securities, and UBS.

Kyobo Life plans to use the proceeds from the issuance to repay borrowings and increase its capital base, as its total capital decreased from 12.9 trillion won on a consolidated basis at the end of last year to 11.9 trillion won at the end of June this year. (Reporting by Chul Kang)