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Korea Exim News

Korea Eximbank, the First ECA Issuing Mexican Peso Bonds

Date 2019.08.02 View 16815

The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman EUN, Sung-soo, “Korea Eximbank”) announced on August 2 that the bank successfully issued 7 billion Mexican peso-denominated bonds (worth USD 370 million) in the Mexican bond market.

 

It is the first time that a foreign ECA has acquired the issuer status and made such transaction in the Mexican currency. Before then, Mexican financial authorities have only granted issuer status to central governments and international development banks such as the Inter-American Development Bank (IDB) and the Central American Bank for Economic Integration (CABEI).

 

Since last year, Korea Eximbank has been recognized as an issuer with sovereign status in Mexico after closely consulting with Mexican financial authorities. This helped the issue to attract high participation from local investors as the bonds were issued complying with local laws.

 

The issue was made in a seven-year maturity, priced at 7.93%, which is equivalent to US Libor + 84bp after the USD swaps.

 

 

Upon the issuance of the peso bonds, Korea Eximbank achieved the twin goals of expanding investor base and diversifying funding sources, securing high demand from investors in Latin America, a new niche market, amid unstable international financial environment such as trade disputes and Brexit.

 

Since November last year, Korea Eximbank has made various efforts to entice local investors in Mexico by holding investor relations roadshows there twice.

 

A Korea Eximbank official said "Thanks to high interest from local investors, we have issued larger-than-planned bonds on good terms." He added "We are planning to actively use the proceeds from the issue to support the overseas expansion of Korean companies of innovative growth industries such as energy, high-tech materials, and ICT convergence through dollar swaps."