South Korea’s top life insurers Samsung Life Insurance Co. and Kyobo Life Insurance Co. will invest combined $129 million in a toll road in Upper Midwest of the United States, eying annual return of 4 percent.

According to financial industry sources on Monday, Samsung Life Insurance will invest $100 million in a toll road in the U.S. through Australia-based infrastructure investment specialist IFM Investors, while Kyobo Life Insurance has placed $29 million in the same infrastructure through American investor MetLife Investment Management.

The two Korean institutional investors decided to invest on the tollway by purchasing part of senior debts backed by profits generated from the road owned by IFM Investors. The Aussie investor in 2015 borrowed $300 million to invest in the toll road, which is nearly 160 miles (257 kilometers) long connecting the state of Indiana and the state of Ohio., and it is selling part of the debts to the two Korean life insurers to refinance its maturing debts.

The Korean investors expected the investment to deliver an annual return of 4 percent.

Investment in bonds backed by social overhead (SOC) projects like toll roads is considered less risky than equity investment and is often preferred on expectation for steady income, said an unnamed financial industry official.

Overseas infrastructure markets have become a good source for making extra profits in the protracted low-interest income environment among Korean institutional investors. The U.S. infrastructure market, especially, is gaining popularity after U.S President Donald Trump last year vowed to spend more than $1 trillion on the country’s infrastructure development over the next 10 years to revitalize the economy and create jobs.

Aiming for steady, higher returns, four Korean institutional investors including Samsung Asset Management have joined hands with IFM Investors earlier this year to create a blind fund worth 545 billion won that will mainly invest in infrastructures in advanced countries with a credit rating of at least A-.

Korean infrastructure projects have also attracted foreign investors over the past years. Australian wealth manager Macquarie Group created Macquarie Korea Infrastructure Fund, raising nearly 1 trillion won ($886.2 million) over the past 15 years, and has invested in infrastructure building and management projects in Korea including expressways, subways, and tunnels. Last year, it also invested 46.2 billion won to take over a 23 percent stake in Incheon Bridge, a toll road connecting the city of Incheon to Incheon International Airport in the country.

By Kang Doo-soon, Song Gwang-sup, and Cho Jeehyun

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