Largest GB Issue
On Jan. 13, the Export-Import Bank of Korea, or Korea Eximbank, successfully issued global bonds worth US$2.25 billion for investors all over the world, which is the largest amount to date by a Korean institution excluding the government.
The interest rates for the five and ten year bonds are 0.9 percent and 1.025 percent higher than the interest rates of U.S. treasury bonds.
The rate is 0.1 percent lower than the five year dollar-denominated bonds issued by the SMBC on Jan. 8, a large commercial bank in Japan.
An official from the bank said, “Considering the fact that the additional interest rate in KEXIM was up to 0.32 percent higher than the SMBC according to their maturities in January of last year, it reflects that the international status of Korea and Japan in the global financial market has recently changed.”
Most of all, the ten year bond has the lowest issue interest rate on record, presenting attractive interest guidance to domestic institutions, which will issue bonds in the future.
Looking at the distribution of investors for the five year bonds by region, Asia accounts for 37 percent, while the U.S. and Europe account for 32 and 31 percent, respectively. For ten year bonds, Asia accounts for 54 percent, while the U.S. and Europe account for 31 and 15 percent, respectively.
Blue-chip investors were actively involved such as central banks in Asia and the Middle East, sovereign wealth funds, international organizations, global pension funds, and insurance companies.
Foreign funds raised by the issuance of the bonds will be used in supporting overseas expansion of the national basic industry closely related to foreign exchange earnings and high employment, including overseas construction and plants, marine shipbuilding, and the exploitation of resources.