Return to Euro Bond Market
The Korea Export-Import Bank (Korea Eximbank) announced on March 9 that they successfully issued 750 million euro bonds. The bonds will go down in history as the first euro bonds since the Korean government’s issuance of foreign exchange stabilization fund bonds in 2014. Therefore, the Korea Eximbank came back to the euro bond market in three years since the bank issued one billion euro bonds in April 2013.
The bonds will mature three years later. Their interest rate is 0.406 percent which is three-year euro swap interest rate (minus 0.174 percent) plus an added interest rate of 0.58 percent. The interest rate is the lowest-ever among Korean-issued euro bonds in history.
“Investors’ strong demand empowered us to issue them at the level of a distribution rate of current bonds without premiums for new issuance,” said a representative at the Korea Eximbank. As stock markets of major countries made a recovery thanks to a rebound of international oil prices, the bank succeeded in the issuance of the euro bonds by accurately catching the point of a recovery in global investment confidence, the representative explained.
“This issuance is meaningful in that the bank consolidated Korean papers’ positions by successfully returning to the euro bond market where Korean organizations were not active in issuing bonds and at the same time, provided liquidity to European investors,” he added.
A total of 88 investors took part in issuing the bonds and placed orders amounting to 1.5 billion euro which was double the amount of issued bonds. By investor, central banks and international organizations accounted for 52 percent. Asset management companies took up 30 percent, followed by pension funds and insurance companies (8 percent), banks (6 percent) and others (4 percent).