Sumitomo Life Insurance Co. said Friday it took out a 75 billion yen perpetual subordinated loan from Sumitomo Mitsui Banking Corp. and other lenders, and simultaneously repaid SMBC and others a combined 225 billion yen in subordinated loans that carried maturity periods.

A perpetual subordinated loan does not carry a maturity and the borrower continues to pay a yield -- which is usually much higher than interest rates accruing from other fundraising tools -- until it redeems the perpetual loan.

With the transactions, the balance of the insurer's subordinated loans came to 395 billion yen, the insurer said.

Since all the loans are perpetual and do not oblige Sumitomo Life to redeem them within a set period, they will help it to maintain a stable long-term capital base.