On March 21 in Sao Paulo, Brazil, the Export-Import Bank of Korea signed an agreement to issue BRL 700 million (USD 400 million) in bonds in the presence of major institutional investors.

The bond issuance is significant as the bond was not only issued at low rates but it marked the first issuance by a Korean institution in the market since the heightened risk of default by Greece early last year, which led to increased risk-aversion of investors and suspension of issuance Brazilian Real bonds by Korean institutions.

Up to now, only international, state-run institutions with high credit ratings such as KfW, the stated owned development bank of Germany, and SEK, the export credit agency of Sweden, have been participating in the Brazilian real-denominated bond market.

Chairman Yong Hwan Kim of the Export-Import Bank of Korea commented, “Brazil, with its abundant natural resources and solid domestic market, is an important channel for securing stable funds amidst increased uncertainty in the international financial markets. The Bank will maintain close cooperative relationships with Brazilian investors to increase opportunities to issue bonds and continue Bank efforts to identify niche markets.”

The Bank has successfully issued a global bond of USD 2.25 billion, the largest single bond issuance by a Korean institution, earlier this year as a result of efforts to preemptively secure foreign capital.

In addition, in response to the uncertain market temperaments due to factors like the Eurozone Crisis, the Bank has been working to diversify loan sources by actively tapping into niche market currencies beyond USD-, JPY-, and euro-denominated bonds* for stable sources of foreign capital.

* As of March 21, USD 1.16 billion of USD 4.37 billion (26.5%) in bond issuance this year were in currencies other than the USD, JPY, or the euro.