The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Yong Hwan Kim, “ Korea Eximbank”) announced on October 14 that it borrowed USD 100 million from the National Bank of Abu Dhabi (NBAD) of the UAE.

The loan agreement was signed on October 12 at Mandarin Hotel, Tokyo, where Chairman Yong Hwan Kim of Korea Eximbank met with NBAD’s Chief Executive Officer Michael Tomalin.

The contract was made under very favorable terms for Korea Eximbank thanks to recent upgrades in the credit ratings of the latter and of Korea by credit rating agencies including Moody’s and S&P.

A Korea Eximbank official noted, “Korea Eximbank was able to lower the interest rate by an extra 20bp in the final stage of negotiations by hammering in the point that Moody’s had elevated our credit rating from A1 to Aa3.”

Furthermore, the bank’s ongoing effort to build networks for borrowing foreign currencies in the Middle East also contributed to the success of this deal.

The Bank has built strong relationships with Middle Eastern clients and investors since Chairman Kim took office last year, by concluding MOUs* with major financial institutions in the region and by holding seminars** focused on the Middle East.
* MOUs have been concluded with 13 institutions in 4 countries including Riyad Bank (MOUs with 10 other institutions under discussion).
** Including the Korea Eximbank-MENA (Middle East and North Africa) Conference (April), the Korea Eximbank Seminar for Ambassadors Representing Middle Eastern and North African Countries (September), and the Middle East Project Outlook and Strategies for Participation Seminar (September)

In particular, Korea Eximbank has established a solid relationship with NBAD by signing an MOU for information and HR exchanges and by providing syndicated loans for projects in the UAE.

Korea Eximbank has secured diverse channels of funding by tapping into non-dollar niche markets such as Japan and Australia, borrowing a total of USD 8.9 billion in foreign currencies (81% of the annual target USD 11 billion) including USD 5.1 billion in non-dollar currencies.

The bank pioneered the borrowing of oil money by becoming the first Asian bank to issue Saudi Riyal-denominated bonds* in November last year.
* Date of issue: November 24, 2011. Amount issued: SAR 7.5 billion (USD 200 million). Rate: Saibor (Saudi’s float rate) + 1.70%