Japan's Dai-ichi Life Insurance Co Ltd will raise $1 billion by issuing dollar-denominated subordinated bonds in overseas markets, a source with direct knowledge of the matter said on Wednesday.

Dai-ichi, the only listed company among Japan's four leading life insurers, is tapping the bond market to take advantage of low interest rates and will use the proceeds to help refinance subordinated loans expected to be redeemed next year, said the source, who was not authorised to discuss the matter publicly.

A Dai-ichi Life spokesman confirmed his company was considering the issuance of dollar-denominated subordinated bonds but said details, including the amount of money to be raised, had not been decided.

The source said the subordinated bond issue was not related to funding for the insurer's $5.7 billion acquisition of Protective Life Corp of the United States. Dai-ichi raised about 260 billion yen ($2.4 billion) to help finance that acquisition by offering new shares earlier this year.

Dai-ichi will issue perpetual subordinated bonds in Europe, the United States and Asia outside Japan, the source said.

Merrill Lynch, JPMorgan, Citigroup, Goldman Sachs and Mizuho are lead underwriters for the deal, said the person, adding that terms of the issue will be announced next week.