Export-Import Bank Issues $1.4 Billion Dollar and Euro Bonds Simultaneously

Successful Dual Currency Issuance Amid Unstable Global Financial Markets
First Eurobond by Korean Institution Since COVID-19 and Largest Issuance Establishing Korean Bond Benchmark

[Asia Economy Reporter Kangwook Cho] The Export-Import Bank of Korea announced on the 21st that it successfully issued simultaneous dollar-denominated (USD 700 million) and euro-denominated (EUR 700 million) bonds totaling USD 1.46 billion (approximately KRW 1.8 trillion) to global investors.

Among these, the euro-denominated bonds are green bonds* and represent the first euro-denominated bonds issued by a Korean institution since the outbreak of COVID-19.

These bonds are special-purpose bonds that restrict the use of the raised funds to support low-carbon and eco-friendly industries such as alternative energy and climate change response, and the issuing institution requires green certification from internationally recognized organizations.

Through this issuance, the bank explained that it has succeeded in issuing bonds in the euro bond market for five consecutive years since 2016, solidifying its status as a leading Korean borrowing institution.

A total of 240 investors participated in the dollar-denominated bonds and 224 investors in the euro-denominated bonds, resulting in overwhelming orders of USD 5.1 billion and EUR 3.2 billion, respectively. Thanks to the abundant orders, the bank succeeded in reducing the interest rates by 40 bps and 35 bps from the initially proposed rates for the dollar and euro bonds, respectively, while also increasing the issuance size by USD 200 million and EUR 200 million beyond the original expectations.

The interest rate was set at 1.20% above the 3-month Libor for the 3-year floating-rate dollar bonds, and at 0.829%, which is 1.05% above the euro mid-swap rate (-0.221%), for the 5-year fixed-rate euro bonds.

The bank plans to actively support the overseas expansion of Korean companies struggling due to the COVID-19 crisis by utilizing the proceeds from the foreign currency bonds issued this time. Additionally, the proceeds from the euro green bonds will be fully used to support eco-friendly industry projects such as renewable energy and secondary batteries.

A bank official stated, "Despite ongoing financial market instability following the spread of COVID-19, it is meaningful to confirm that investment demand for Korean bonds remains robust," adding, "We have set a Korean bond benchmark for domestic institutions planning to issue dollar and euro bonds and created an opportunity for the euro market, alongside the dollar market, to be utilized as a foreign currency funding market for Korean institutions."

This content was produced with the assistance of AI translation services.