KB Kookmin Bank Issues 500 Million Euro Covered Bond... To Be Used for Greenhouse Gas Reduction and More
[Asia Economy Reporter Park Sun-mi] KB Kookmin Bank announced on the 14th that it successfully issued a 5-year maturity global covered bond worth 500 million euros.
This is the second issuance following the first euro-denominated covered bond (dual recourse bond) issued by a domestic commercial bank in July last year. The issuance interest rate was set at an annual 0.048%, which is 14 basis points above the 5-year euro swap rate, and it will be listed on the Singapore Exchange.
The bond received the highest credit rating of ‘AAA’ from international credit rating agencies Standard & Poor’s (S&P) and Fitch, recognizing its high creditworthiness and stability. It is interpreted that the strong demand from investors was driven by increased interest in Korean bonds following the successful issuance of foreign exchange bonds by the government.
Orders exceeding a total of 1 billion euros were secured. Notably, this euro-denominated covered bond is the first green covered bond in Korea, and the funds raised will be used for eco-friendly projects aligned with KB Kookmin Bank’s ‘Sustainable Finance Management System,’ such as greenhouse gas reduction and support for renewable energy businesses.
BNP Paribas, Citigroup, Credit Suisse, ING, JP Morgan, and KB Securities participated as lead managers in this issuance. By region, over 99% of investors were from Europe, and by investor type, central banks and international organizations accounted for 25%, asset management companies 49%, and banks 26%.
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A KB Kookmin Bank official explained, “Through consecutive euro-denominated covered bond issuances, we were able to raise foreign currency funds at competitive interest rates,” adding, “In particular, by issuing the first green covered bond domestically, we not only reduced the spread but also enhanced our international status as a leading financial institution in domestic ESG (Environmental, Social, and Governance) management.”
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