□ On September 9, Korea Eximbank (www.koreaexim.go.kr, Chairman & President Yong Hwan Kim) successfully issued a USD 1 billion global bond, thus becoming the very first Asian institution to do so after the downgrade of America’s credit rating.

○ Amid frozen investor confidence, Korea Eximbank successfully issued the first large bond in Asia despite difficult conditions such as fears of a recession in the US and the European debt crisis.

○ The bond issuance is significant as it set a model for other Korean institutions to issue bonds and a guideline for interest rates.

□ An official from Korea Eximbank stated, “Although issuance of a large-scale foreign currency bond was difficult due to market uncertainties, Korea Eximbank pursued bond issuance after President Obama’s speech on the economic stimulus package and the ruling by the German Constitutional Court that the Greek bailout was legal as these two events created a positive momentum and outlook.”

○ “A bank usually conducts IR activities for foreign investors before bond issuance. Korea Eximbank, however, as the representative foreign currency bond issuer of Korea, was able to forego such marketing activities and tap into existing relationships with foreign investors to quickly take advantage of the temporary upswing in the market.”

□ The bond was issued at a rate of 4.443%, the US treasury yield plus spread. Considering recent market volatility, the rate of issuance was satisfactory.

○ With the US treasury yield at an all time low, Korea Eximbank was able to lower the interest rate.

○ Even compared to 10-year global bonds issued at rates of 4.646%~5.1985% by foreign institutions with similar credit ratings (A) as Korea Eximbank, the rate of issuance of Korea Eximbank’s global bond was attractive.

* As of June 28, the Malaysian government (A-): 4.646% / June 7, the Polish government (A-): 4.713%

□ In addition, the Bank announced that there was great demand for the global bond with investment orders totaling USD 3 billion, three times the total bond amount, including investment orders of USD 140 million from 14 institutions in the Middle East.

○ Many of the major investment institutions participated in the bond.
* Investor distribution by type: asset management (62%), insurance (21%), commercial banks (6%), central banks (5%), private banks (3%), and others (3%)
* Investor distribution by region: US (54%), Asia (36%), and Europe (10%)

□ Korea Eximbank also plans to target niche markets by issuing bonds in various local currencies in 14 countries including Thailand, Brazil, and Malaysia to secure a total of USD 6.4 billion this year.

□ Korea Eximbank will use the funds from the recent global bond issuance towards national strategic projects such as overseas plants, green industry exports, and overseas resource development.