The Export-Import Bank of Korea (Korea Eximbank) announced on the January 18 that it has successfully issued US$360 million in bonds, owing to the high confidence in Korea’s economic health.

The US$360 million was raised through a US$200 million 3-year Uridashi Bond* and a public offering of a 500 million Malaysian ringgit 5-year bond.

*Uridashi Bonds: bonds issued in small amounts in different currencies to Japanese private investors (commonly referred to as Mrs. Watanabe). Usually, only international organizations and institutions with rating equal to or above AA are able to issue the bonds; in Korea, Korea Eximbank was the first institution to issue Uridashi (issued on January 2011).

Prior to this bond issuance, Korea Eximbank successfully floated US$2.25 billion in global bonds, the largest to date by a Korean institution, on January 5, 2012.

Uridashi Bonds issued on the 18th were in foreign currencies of the Australian dollar, Japanese yen, United States dollar, and the South African rand.

Interest rates for the bond was libor +2.00% after swapping with the US dollar, which is 0.5%p lower than comparable bonds issued in US dollars with the same maturity period.

Korea Eximbank attributes the successful issuance to the prolonged near-zero interest rates of Japan, credit downgrades of major European banks, and issuance tailored to the needs of small-scale Japanese private investors.

The positive response of Japanese private investors despite the death of North Korean Leader Kim Jong-il demonstrates the confidence of Japanese investors in Korea’s economy and reduced concerns about geopolitical risks in the Korean peninsula.

The Malaysian ringgit bond, issued alongside the Uridashi Bond, has swap interest rates of Libor + 2.54% in US dollars.

A representative of Korea Eximbank commented, “Solid growth by Korea despite global contractions prompted increased demand from Malaysia for investment in Korea. In addition, timely exploitation of reversed US dollar to Malaysian ringgit swap conditions (which were previously deemed disadvantageous after the credit downgrade of the US last August) contributed to the successful issuance of the bonds.”

Since 2008, Korea Eximbank has issued a total of US$1 billion in Malaysian ringgit bonds. In so doing, the Bank has established a solid reputation among investors around the world.

As uncertainties from European and US financial markets spread, non-US dollar niche markets in Asia have risen in importance. Korea Eximbank plans to increase investor briefings tailored to such markets and continue efforts to reduce costs and diversify funding markets.

Last year, Korea Eximbank raised US$6.7 billion (66% of the $10.3 billion total foreign currency borrowings) from 17 non-US dollar markets such as the Middle East and Switzerland.