Shinhan Card Issues Overseas ABS with Interest Rate in the 1.5% Range

Issuance of USD 400 Million Overseas ABS at Interest Rate Approximately 20bp Lower Than Domestic Procurement

[Asia Economy Reporter Ki Ha-young] Shinhan Card has succeeded in issuing a large-scale overseas asset-backed securities (ABS) at a low interest rate of around 1.5%, despite the difficult financial environment for fundraising.

Shinhan Card announced on the 23rd that it issued overseas ABS worth 400 million dollars (approximately 487.2 billion KRW). The average maturity is 3 years, and currency and interest rate swaps were used to eliminate risk factors arising from exchange rate and interest rate fluctuations. The ABS was issued based on credit card sales receivables as underlying assets, and received the highest rating of Aaa from the international credit rating agency Moody's without payment guarantees from overseas insurance companies or banks.

In particular, while maintaining industry-leading ABS issuance conditions, the securities were issued at an interest rate in the 1.5% range, about 20 basis points lower than domestic funding, significantly reducing funding costs. This achievement was made amid a tightening of dollar liquidity due to concerns about an economic downturn caused by the spread of COVID-19.

A Shinhan Card official said, "The funds raised this time are planned to be used for repayment of existing borrowings and operating funds," adding, "Despite the ongoing tightening of domestic and international financial markets due to the impact of COVID-19, we successfully issued ABS worth approximately 400 million USD based on our high external credibility and the excellence of our assets, thereby reducing funding costs and significantly alleviating the burden of card bond issuance in the credit specialized financial company bond market's tight phase."

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