Kookmin Bank Issues Foreign Currency Bonds with SOFR-Linked Variable Interest Rates

Bond maturity of 18 months with an issuance rate of SOFR variable rate plus 45bp
First issuance among commercial banks
Issuance rate is the lowest among Asia SOFR-linked bonds

[Asia Economy Reporter Park Sun-mi] KB Kookmin Bank announced on the 29th that it has successfully issued $200 million worth of SOFR-linked floating rate foreign currency bonds.

SOFR refers to the Secured Overnight Financing Rate, a one-day repo rate backed by U.S. Treasury securities. It is presented as a representative alternative benchmark rate to LIBOR, which is scheduled to be discontinued, and is currently mainly used by top-tier institutions in the U.S. and Europe for issuing floating rate bonds.

The maturity of the bonds issued by KB Kookmin Bank this time is 18 months, and the issuance rate is set at SOFR floating rate plus 45 basis points, which is the lowest level among SOFR-linked bonds issued in Asia.

There have been cases of policy banks issuing SOFR-linked bonds last year, but KB Kookmin Bank is the first among commercial banks to issue such bonds. Furthermore, this issuance is significant as it is the first SOFR-linked bond issued by a private institution in Asia targeting high-quality U.S. investors. A KB Kookmin Bank official stated, “With the planned discontinuation of LIBOR usage, we have proactively prepared the SOFR system,” and added, “We expect this issuance to activate the issuance of SOFR-linked bonds domestically.”

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