Korea Development Bank Issues Eurobonds Worth USD 1 Billion

[Asia Economy Reporter Jo Gang-wook] The Korea Development Bank announced on the 28th that it has issued 1 billion USD worth of dollar-denominated Eurobonds targeting investors in Asia and Europe.

This bond was issued as a 5-year maturity fixed-rate bond. The proceeds will be used for foreign currency funds to support domestic companies struggling due to the COVID-19 pandemic.

After the COVID-19 outbreak intensified, in early April, KDB resumed overseas bond issuance of Korean bonds by issuing a 3-year bond with a spread of 145 basis points over Libor. With this 5-year issuance, the bank explained that it recovered a double-digit spread (around Libor +85bp), creating momentum for a significant reduction in funding costs.

A KDB official stated, "Despite volatility in global financial markets, we confirmed that investor demand for Korean bonds remains robust due to the limited impact of COVID-19 on Korea, Korea’s active implementation of fiscal and financial policies, and expectations for a full-scale economic reopening."

KDB successfully raised 1 billion USD by attracting investment orders approximately five times the issuance amount. The final coupon rate was set 35 basis points lower than the initial price guidance (Initial Price Guidance, U.S. Treasury 5-year +125bp area).

Through this issuance, KDB expects to gauge overseas investor trends regarding Korean bonds and establish a benchmark rate for 5-year maturities, thereby creating a favorable issuance environment for domestic institutions planning overseas bond issuance.

A KDB official added, "Since KDB’s 500 million USD public bond issuance on the 7th of last month, overseas public bond issuance by domestic institutions has resumed," and "This issuance confirmed that borrowing conditions in the foreign capital market for Korean institutions continue to improve."

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