□ On August 11, Korea Eximbank (www.koreaexim.go.kr, Chairman Yong Hwan Kim) announced that the bank successfully issued the Dim Sum Bond in Korea, thus becoming the very first Korean financial institution to do so despite difficult market conditions and the downgrade of America’s credit rating.

* Dim Sum Bond: a Chinese renminbi-denominated bond issued in Hong Kong at a lower interest rate than bonds issued in mainland China.

○ The bond amount totaled RMB 392 million (equivalent to USD 62 million), and despite high market volatility, the bond was issued at a better interest rate than US dollar-denominated bonds.

□ In a month marked by high market volatility with fears of a double dip recession, the European debt crisis, and the credit rating downgrade of the US, the success of Korea Eximbank in securing USD 920 million* through various methods including the issuance of the Dim Sum Bond, private placement bonds, and CPs helped to calm fears that domestic banks may not be able to secure sufficient foreign currencies.

* USD 244 million in private placement bonds, USD 317 million in bank loans, USD 360 million in CPs

□ An official from Korea Eximbank stated, “After the downgrade of US credit ratings, many anticipated a weaker dollar and stronger renminbi. Korea Eximbank timely identified the increased demand for renminbi-denominated bonds and aggressively pursued issuance of the Dim Sum Bond.”

○ “By successfully issuing the Dim Sum Bond, the bank established a foundation for regular bond issuance in China’s money market, a market with much potential for growth.”

□ Regarding the outlook on future borrowing of foreign currencies, the official stated, “The current market differs from that of 2008 when Lehman Brother’s went bankrupt because there is high liquidity in the market and investors are seeking to make safe investments. If Korean institutions strategically approach investors introducing the strong fundamentals and sound financial status of the Korean economy, investment to Korea may seem very attractive.”

* Foreign banks such as BNY Mellon decided to impose charges for large deposits.

○ “Looking for safe assets, investors are turning to Japan, Switzerland, and Hong Kong. In preparation for increasing volatility in a crisis, the bank should diversify credit lines in non-dollar currency markets.”

○ In January 2009, when foreign liquidity was limited due to the Lehman Brothers bankruptcy, Korea Eximbank, as a representative Korean policy bank, successfully issued a large-scale global bond of USD 2 billion and led the way for foreign currency bond issuance by Korean institutions.