KB Kookmin Bank Successfully Issues 500 Million Euro Global Covered Bond

Obtained AAA Rating from International Credit Rating Agencies Despite Interest Rate Hike Burden

[Asia Economy Reporter Yu Je-hoon] KB Kookmin Bank announced on the 21st that it successfully issued a 5 billion euro, 3 years and 6 months maturity global covered bond (Covered Bond, dual recourse debt) on the 20th.

This euro-denominated covered bond is KB Kookmin Bank's third issuance following July 2020 and October last year. The issuance rate was set at an annual 2.405%, which is the euro mid-swap (MS) rate plus 27 basis points (1bp=0.01%), and it will be listed on the Singapore and Frankfurt exchanges.

Despite increased financial market volatility due to interest rate hikes by the U.S. Federal Reserve (Fed) and the European Central Bank (ECB), the bank explained that it attracted strong demand from European investors based on creditworthiness and stability, having received the highest AAA credit rating from international credit rating agencies Standard & Poor's (S&P) and Fitch.

This euro covered bond is issued in the form of a sustainability bond, and the raised funds will be used for eco-friendly and social projects under KB Kookmin Bank's sustainable finance management system. Since issuing the first foreign currency sustainability bond among commercial banks in 2018, Kookmin Bank has issued a total of 10 foreign currency environmental, social, and governance (ESG) bonds, establishing its image as a global ESG bond issuer.

A KB Kookmin Bank official stated, "Despite market volatility expanding due to inflation concerns and interest rate hikes by central banks worldwide, we were able to raise foreign currency at a competitive rate through the issuance of covered bonds, which are recognized as safe assets. In particular, by issuing euro covered bonds for three consecutive years, we have gained high interest from European investors and established ourselves as a leading covered bond issuer in Asia."

Meanwhile, BNP Paribas, Citigroup, Cr?dit Agricole, ING, LBBW, and Soci?t? G?n?rale participated as lead managers in this covered bond issuance. The investor composition was 93% European and 7% Asian by region, and by institution type, asset management companies accounted for 49%, banks 32%, central banks and international organizations 13%, and insurance companies and pension funds 6%.

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