One of South Korea’s major policy banks, the Export-Import Bank of Korea (Kexim), returned to the US dollar bond market for the second time this year with another triple-tranche transaction totalling US$2 billion, including the longest tenor ever publicly sold US dollar-denominated note offering by a Korean financial institution.
The SEC-registered deal comprised of a three-year bond amounting to US$750 million, which was priced at 99.947% with a coupon of 0.625% to offer a yield of 0.643%. This was equivalent to a spread of 20bp over the US treasuries, which was in line with the final price guidance and 25bp tighter than the initial guidance of 45bp area.
The second tranche was a 5.5-year bond also amounting to US$750 million, which was priced at 99.533% with a coupon of 1.125% and a re-offer yield of 1.213%. This represented a spread of 35bp over the US treasuries, which was likewise in line with the final price guidance and 25bp inside the initial marketing range of 60bp area.
The third and final tranche was a 20-year bond amounting to US$500 million, which was priced at 99.220% with a coupon of 2.50% to offer a yield of 2.55%. This was equivalent to a spread of 50bp over the US treasuries, which was also in line with the final price guidance and 35bp tighter than the initial guidance of 85bp area. The 20-year bond is a rare maturity sold in the US dollar public bond market by a Korean financial institution.
Kexim previously accessed the US dollar bond market in February this year, raising a total of US$1.5 billion in three tranches of 3/5/10 years.
The latest deal generated a total order book of US$5.4 billion with the three-year bond garnering demand amounting to US$1.8 billion from 67 accounts. The offering was almost equally distributed in Asia (35%), EMEA (35%) and the United States (30%). By type of investors, central banks, sovereign wealth funds and sovereigns, supranationals and agencies (SSAs) accounted for 76% of the paper, while asset managers, insurance companies and pension funds took 19% and banks, private banks and other investors 5%.
The 5.5-year tranche attracted a final order book of US$2.1 billion from 79 accounts with 59% of the bonds allocated in EMEA, 36% in Asia and 5% in the US. Banks, private banks and other investors bought 43% of this tranche, while the central banks, sovereign wealth funds and SSAs took 39% and asset managers, insurance companies and pension funds accounted for the remaining 18%.
The 20-year bond generated a total demand of US$1.5 billion from 72 accounts with 58% of the paper sold in Asia, 23% in the US and 19% in EMEA. Asset managers, insurance companies and pension funds accounted for the bulk of this tranche as they bought 74%, while the central banks, sovereign wealth funds and SSAs took 14% and banks, private banks and other investors 12%.
Proceeds from this deal will be used for general corporate purposes. BofA Securities, Credit Agricole CIB, Mizuho Securities, NH Investment & Securities, Societe Generale and Standard Chartered were the joint bookrunners for this transaction, while KEXIM Bank (UK) acted as a co-manager.
Kexim is aiming to raise a total of US$11 billion in funding requirements this year.
