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EXIM

Press Release

Korea Eximbank Issues EUR 750 Million Euro Bond

Date 2019.03.19 View 16966

The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman EUN, Sung-soo, “Korea Eximbank”) announced on March 19 that the Bank successfully issued a EUR 750 million (USD 850 million) Euro Bond on March 18, taking advantage of high liquidity and favorable swap conditions in the euro debt market.

 

This is the first euro-denominated public offering by a Korean institution this year. Successfully issuing the euro bonds for four consecutive years since 2016, Korea Eximbank has been setting benchmarks for Korean bond issuers as the country's leading borrower.

 

Backed by investors’ confidence in the Korean economy’s fundamentals, the CDS premium on Korean papers is currently standing at 28bp, which is the lowest since the global financial crisis.

 

In particular, Korea Eximbank attracted a large number of blue-chip investors despite concerns over the progress of denuclearization of the Korean Peninsula after the second summit between the U.S. and North Korea, and succeeded in issuing the bonds without a New Issuance Premium (NIP).

 

The five-year bond issued on this day was priced at 0.411 percent, a 0.32 percent spread above the 5-year euro mid-swap rate (0.091 percent), achieving the lowest rate (on a five-year basis) among all Korean benchmark issues.

 

The bond attracted a total of 120 investors. By type of investors (assignment basis), central banks and international organizations accounted for 44%, banks 28%, asset managers 20%, and pension funds and insurance companies 8%, respectively.

 

A Korea Eximbank official said, "We spotted high demands in the euro capital market for Korea's blue-chip bonds, which maintain a robust growth trend amid unstable financial market conditions triggered by the U.S.-China trade dispute, Brexit, etc."

 

He added, "The proceeds obtained through this issue will be used as a funding source for strengthening our support for Korean companies operating in Europe, increasing Korean companies’ competitiveness to win new projects, and actively supporting projects serving as a future growth engine for the Korean economy."

 

As the nation’s biggest issuer of international bonds, Korea Eximbank aims to diversify its funding resources in the international debt markets with the target of USD 10 billion for this year, actively attracting top-notch investors such as central banks, supranationals and pension funds.