To Extend Foreign Currency Loans to Korean Companies

Korea Development Bank said on May 28 that it has raised US$1 billion by issuing dollar-denominated Eurobonds to Asian and European investors.

The bonds are five-year fixed-rate bonds. The bank will extend the money raised through the bond issuance to Korean companies that have been suffering from the COVID-19 crisis.

The bond’s interest rate was set at 90bp over the five-year Treasury bills, which was lower than that of the three-year foreign currency bonds (LIBOR+145bp) issued in early April. The issuance rate was 35bp lower compared with that offered by the Initial Price Guidance (five-year U.S. government bonds + 125bp area).

KDB expects the issuance to help grasp overseas investors' response to Korean papers and present a benchmark interest rate for five-year bonds, thereby creating an environment favorable to local institutions ahead of the issuance of overseas bonds.

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