Export-Import Bank Issues 1.5 Billion Euro Global Bond... Largest Ever by Korean Entity

Procured Funds Invested in Korean Companies' Local Renewable Energy Projects and Secondary Battery Production Facilities in Europe

[Asia Economy Reporter Yoo Je-hoon] The Export-Import Bank of Korea announced on the 18th that it has successfully issued a global bond worth a total of 1.5 billion euros (approximately 2 trillion KRW), marking the largest euro-denominated public offering by a Korean institution.

The bank praised the success of the euro bond issuance as a means to maintain its status as the largest issuer domestically and reaffirm overseas investors' confidence in the Korean economy. The bank explained that the issuance was timed optimally before the European interest rate hike amid ongoing investment sentiment turmoil caused by the US rate increases.

The euro bonds issued on this day were structured as a dual tranche consisting of a 550 million euro 2-year floating rate note and a 950 million euro 3.5-year fixed rate note. The dual tranche structure refers to issuing two types of bonds simultaneously with different maturities or interest rate conditions.

Notably, the 2-year floating rate note was a first attempt by the bank, targeting Money Market Funds (MMF) rather than the bank’s existing investor base, and was issued as a Green Bond. This new approach was taken to actively respond to market demand amid increasing volatility and to expand the investor base.

The 1.5 billion euros raised this time will be directly invested in renewable energy projects and large-scale secondary battery production facilities primarily carried out by Korean export companies in the European region. The bank has approved financial support for numerous euro-denominated projects, including the energy storage system (ESS) construction project in Ireland and the secondary battery production facility project in Hungary, both secured by Korean companies.

A bank official stated, "As the most familiar Korean issuer to global investors, the bank has always played a leading role in opening the issuance market during times of increased uncertainty such as financial crises, and has functioned to lower issuance costs across Korean issuers by achieving the lowest spread. In the post-COVID era, to actively respond to the expected increase in overseas investment and mergers & acquisitions (M&A) demand from Korean companies, we plan to continue proactive foreign currency fundraising despite the challenging financial environment."

Meanwhile, following the issuance of a record 3 billion dollar global bond by a domestic institution in January, the bank also issued approximately 500 million dollars worth of Kangaroo bonds in March.

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