KB Kookmin Bank Issues $500 Million Foreign Currency Bonds for COVID-19 Response

[Asia Economy Reporter Kangwook Cho] KB Kookmin Bank announced on the 24th that it successfully issued a 5-year senior global bond (144A/RegS) worth 500 million dollars the previous day.

This issuance is in the form of a COVID-19 response sustainability bond and is the first COVID-19 response bond among foreign currency global public bonds issued by a domestic issuer. The issuance yield was set at an annual rate of 1.872%, which is 150 basis points above the 5-year US Treasury yield (equivalent to 142 basis points above the 3-month LIBOR), and it will be listed on the Singapore Exchange.

KB Kookmin Bank has continuously made efforts to support small and medium-sized enterprises and small business owners, including providing funds to companies affected by COVID-19. The funds raised this time are planned to be used for repayment of related borrowings aimed at environmental and social problem-solving purposes, which fall under the 'Sustainable Finance Management System.'

Amid the sluggish dollar issuance market in Asia due to the recent spread of COVID-19, this issuance led strong demand based on its representativeness as the first 5-year fixed-rate Korean bank bond issued after COVID-19. As a result, orders exceeding approximately 3.9 billion dollars (7.8 times the issuance amount) were secured from a total of 181 institutions, and the spread was reduced by 45 basis points compared to the initially proposed rate (initial guidance).

A KB Kookmin Bank official said, "This issuance attracted high interest from overseas bond investors due to Korea's COVID-19 response capability, which the world is paying attention to, and the symbolic value of being the first COVID-19 response public bond by a domestic issuer, and it was issued at a level lower than the existing Korean bond market price." He added, "In particular, it is expected to greatly contribute to improving issuance conditions and reducing spreads in the Korean overseas bond market."

This issuance was led by BofA Securities, Citigroup, Commerzbank, HSBC, Soci?t? G?n?rale, and Standard Chartered Bank as joint lead managers, with KB Securities acting as co-manager. The investor composition by region was 70% Asia, 19% the United States, and 11% Europe; by investor type, asset management companies accounted for 64%, banks/financial institutions 23%, insurance/pension funds 11%, and private banking/others 2%.

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