Kyobo Life Insurance has begun to make full-fledged moves in the field of innovative financial services, including investing in aircraft engine parts.
On the 21st, Kyobo Life Insurance was designated as a trust business operator for the 'Aircraft Engine-based Trust Beneficiary Securities Trading Distribution Service' by the Financial Services Commission. This service issues trust beneficiary securities based on the real asset of aircraft engines and distributes them through a digital platform. The Financial Services Commission's innovative financial service system, introduced in April 2019, is a system that grants regulatory exceptions for a certain period of time to innovative services that are difficult to introduce under existing financial regulations. This designation was also made as part of this system.
The business will be managed by Galaxia Money Tree, an integrated electronic payment (PG) solution provider, and Kyobo Life will participate as a trustee. Galaxia Money Tree will purchase real assets, such as aircraft engines, and put them in trust to promote asset securitization. Kyobo Life will be in charge of issuing trust beneficiary securities through electronic registration by accepting these assets as trustees.
Next, Galaxia Money Tree will create a tokenized security (STO) based on profit securities and apply blockchain distributed ledger technology. It plans to distribute this through various platforms such as Shinhan Investment Securities and recruit general investors. The aviation finance market, which was previously accessible only to institutional investors, will now be opened to general investors.
Domestic low-cost carriers (LCCs) have been using engines through operating leases from foreign leasing companies due to the cost burden of purchasing spare engines. However, due to the lack of domestic leasing infrastructure and the high dependence on overseas markets, the problem of national wealth outflow has persisted. This service is expected to enable airlines to reduce costs and at the same time contribute to securing operational stability. For general investors, it is evaluated as a new investment method linked to the aviation industry and a financial product with enhanced stability.
In December of last year, Kyobo Life Insurance, Galaxia Money Tree, Korea Aviation Association, Korea Aviation Service, and VMIC signed a business agreement to promote the service. Kyobo Life Insurance and Galaxia Money Tree plan to sequentially proceed with detailed procedures such as securing aircraft engines and issuing trust beneficiary securities in the first half of the year at the earliest.
