The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Yong Hwan Kim, “ Korea Eximbank”) announced on September 25 its plans to provide customized financing to exporters at lower interest rates so as to share the benefits of the upgrade in Korea’s credit rating.

Moody’s, S&P and Fitch have recently raised Korea’s credit rating, thanks to which Korea Eximbank’s borrowing rate spread is expected to fall by at least 15 basis points (bp).

This would result in annual interest payment savings of over KRW 18 billion for Korea Eximbank, the largest foreign currency bond issuer* in the country.
* 2012 foreign currency funding target: USD 11 billion

Using savings in borrowing costs, Korea Eximbank is planning to immediately reduce project finance loan rates for Korean companies in the plant, shipbuilding, and power inustries to help them compete for large-scale projects against Japanese, Chinese, and European rivals.

In addition, Korea Eximbank plans to increase its ceiling for rediscounting trade bills* by KRW 1 trillion to KRW 3.7 trillion.
* Rediscount on trade bills is a form of financing provided to exporters by rediscounting trade bills (with maturities of less than two years) purchased by commercial banks based on export documentation

Chairman Yong Hwan Kim of Korea Eximbank commented, “The upgrade in the national credit rating is the result of the collective effort of Korean workers, exporters and the government in overcoming external adversities. As a government-mandated bank, Korea Eximbank will do its utmost to ensure that the higher credit rating translates into real benefits for the national economy, by strengthening support for vulnerable sectors as well as for export industries.”