The Export-Import Bank of Korea announced on April 19 that it has successfully sold JPY 37.5 billion (USD 450 million) in Uridashi Bonds to Japanese private investors.

* Uridashi Bonds: bonds issued in small amounts in different currencies to Japanese private investors. Usually, only international organizations and institutions with ratings equal to or above AA are able to issue Uridashi Bonds. The Export-Import Bank of Korea is the first institution to issue Uridashi Bonds (January 2011) in Korea.

Chairman Yong Hwan Kim of the Bank concluded a contract for Uridashi Bond issuance with Mr. Takashi Hibino, President of Daiwa Securities, at the Tokyo Imperial Hotel.

To comprehensively meet the demands of Japanese private investors seeking foreign exchange gains and high-yield investment products, the bond was issued in two currencies, the Brazilian real and the Japanese yen.

The Bank successfully raised USD 2.3 billion from the Japanese market through its Uridashi Bond issuance on January of last year.

The success of the issuance despite heightened geopolitical risks in the Korean peninsula, such as the recent rocket launch by North Korea, was mainly due to the Bank’s PR activities targeting Japanese private investors, who are known for investing only in well-established banks with strong credit ratings, such as ADB, KfW, etc. In addition, the Bank actively exchanged information through regular consultative groups with Japanese financial institutions to facilitate successful issuance of the Uridashi Bond.

The Bank issued USD 860 million in the Uridashi Bond market this year, an amount that positions it among the top ten* bond issuers in the world.

* Top issuers of Uridashi Bond: ADB - 1st, Barclays - 5th, KEXIM - 8th

A representative of the Bank commented, “Japanese private investors, the second largest asset holders in the world, prefer to invest in products they have invested in before. As such, they are considered a reliable source for foreign currency even in times of financial crisis.”

“So far this year, the Bank has secured a total of USD 5.2 billion* in foreign currencies via securities including the Uridashi Bond, and will continue to diversify its source of funding by exploring other markets and actively conducting IR activities in order to secure a stable source of foreign currency for Korean exporting firms.

* Of the target USD 5.17 billion to be raised this year, 17% (USD 860 million) was raised through Uridashi Bonds

Thomson Reuters DealWatch*, a leading authority in Japanese financial market analysis, announced on March 2 that it selected the Export-Import Bank of Korea for the Samurai Bond of the Year 2011 award in recognition of the Bank’s successful bond issuance in June.

The award highly evaluated the Bank’s issuance of the bond with tenors of 2, 3, and 5 years and amounting to JPY 80 billion, the largest by a Korean institution, despite decreased demand for Samurai Bonds following Japan’s devastating earthquake in 2011.

* Thomson Reuter is Japanese financial market analysis service in Japan (affiliated with IFR). Established in 1995, the DearWatch Award is the only award recognizing the Samurai Bond market.