Korea Eximbank Issues $1.5 Billion Foreign Currency Bonds to Expand New Deal Support

With the Government's Successful Eurobond Issuance, a Total of 1.5 Billion USD Including US Dollars Issued
Proceeds to Be Used for Supporting SMEs Affected by COVID-19 and Expanding New Deal Support

[Asia Economy Reporter Kangwook Cho] The Export-Import Bank of Korea (KEXIM) announced on the early morning of the 15th that it had issued a total of $1.5 billion in global bonds to investors worldwide.

The global bonds issued by KEXIM consisted of three types: a 3-year maturity Euro-denominated bond worth 500 million euros, a 5-year maturity US dollar-denominated bond worth 400 million dollars, and a 10-year maturity US dollar-denominated bond worth 500 million dollars.

A total of 251 investors placed orders amounting to $7.62 billion, which is 5.1 times the target amount, reaffirming the strong trust of overseas investors in KEXIM bonds as safe assets through this issuance.

Amid increased volatility in financial markets, including a decline in the US stock market, the Korean government issued foreign exchange stabilization bonds with the first-ever negative interest rate (Euro-denominated) and the lowest interest rate in history on the 9th. KEXIM actively leveraged this momentum to attract strong investment demand from global investors.

KEXIM used the previous foreign exchange stabilization bond issuance as a benchmark, lowering the spread by 10 to 15 basis points compared to the yield on similar maturity KEXIM bonds in circulation, thereby presenting a favorable reference interest rate for subsequent issuances by domestic institutions.

In particular, KEXIM’s first Euro-denominated social bond with a 3-year maturity achieved a negative interest rate of -0.118%, the lowest among Korean institutions, and the 10-year US dollar bond recorded the lowest interest rate since the 2008 financial crisis.

Following the government’s foreign exchange stabilization bonds, the successful issuance of KEXIM’s foreign currency bonds is expected to further accelerate the reduction of foreign currency funding costs for domestic companies and financial institutions in the future.

A KEXIM official stated, "The government’s foreign exchange stabilization bonds, which serve as a benchmark for KEXIM’s rates, were successfully issued last week. Thanks to Korea’s response to COVID-19 and its external soundness being highly evaluated overseas, KEXIM was able to secure funds at low interest rates. We plan to actively use the low-interest funds secured through this bond issuance to support small and medium-sized enterprises struggling due to COVID-19 and to expand support for the Korean New Deal projects."

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