National Policy Bank Successfully Issues Global Bonds Despite Adverse Conditions

Export-Import Bank Issues $2.5 Billion Global Bonds
Industrial Bank Issues $2 Billion Global Bonds

[Asia Economy Reporter Song Hwajeong] Amid the recent expansion of volatility in the global financial markets, policy banks have consecutively succeeded in issuing global bonds.

According to the financial sector on the 11th, the Export-Import Bank of Korea (KEXIM) successfully issued a total of 2.5 billion USD (approximately 3.46 trillion KRW) worth of USD global bonds to investors worldwide on the 7th.

This bond was issued in a multi-tranche structure with maturities of 2, 5, and 10 years. In particular, the debut public offering 2-year bond is evaluated as a strategy that accurately predicted market conditions and investor demand, according to KEXIM. Additionally, the issuance size of the 2-year and 5-year bonds was 1 billion USD each, solidifying KEXIM’s status as an SSA (Supranational, Sovereign, and Agency) issuer, which includes governments, international organizations, and policy institutions.

KEXIM’s bond issuance was carried out under adverse conditions amid ongoing volatility in the international financial markets. Currently, the global investment market is experiencing weakened investor sentiment due to persistent tightening policies by major countries in response to global inflation and concerns over economic recession. In fact, the issuance volume by investment-grade (IG) institutions in the international bond market has decreased by 22% compared to the previous year over the past year.

Amid this, KEXIM judged the end of the summer vacation and the point when the previously sluggish bond issuance began in earnest as the optimal timing and boldly proceeded with bond issuance, resulting in achieving the largest Korean bond benchmark in the second half of the year.

Earlier, the Korea Development Bank (KDB) issued 2 billion USD worth of global bonds on the 31st of last month.

The bond consists of a multi-tranche structure of fixed-rate bonds with a 3-year maturity of 1 billion USD, a 5-year maturity of 500 million EUR, and 450 million USD.

KDB explained that despite increased volatility in the financial markets, such as the strengthened outlook for aggressive US interest rate hikes following the Jackson Hole meeting, they confirmed high interest from global investors.

In particular, for the dollar bonds, 36% of investors were composed of top-tier investors such as central banks of various countries and international organizations.

A KDB official stated, "As a representative policy financial institution, we plan to continuously strengthen the perception of Korean bonds as safe assets and create a favorable issuance environment for Korean institutions."

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