Shinhan Bank announced on April 16 that it successfully issued US$400 million (454.60 billion won) worth of subordinated bonds on April 15.
The bank issued the bonds to raise funds to support environment-friendly companies and social enterprises. The bonds have a maturity of 10 years and the interest rate is 1.575 percentage points higher than the 10-year U.S. government bond. This is the lowest interest rate on foreign currency-denominated bonds issued by domestic financial institutions. The bonds are sold at a coupon rate of 4 percent. A lower additional interest rate on bonds means that there is a high level of market confidence in the issuer.
About 100 institutions participated in the latest subscription of Shinhan Bank’s subordinated bonds and subscriptions amounted to over US$2 billion (2.27 trillion won), which was five times higher than the amount issued. By region, Asian investors accounted for 50 percent of the total, the Americas 33 percent and Europe 17 percent.
Based on its sound investor base, Shinhan Bank has become the only financial institution in Asia that succeeded in issuing subordinated bonds for four years in a row. The bank said it is now able to stably manage its capital adequacy ratio and flexibly respond to variability in the financial market in the future.