Korea Investment & Securities, First Korean Securities Firm to Issue Samurai Bonds
Korea Financial Group subsidiary Korea Investment & Securities announced on the 14th that it successfully issued Samurai bonds worth 20 billion yen. Samurai bonds are yen-denominated bonds issued by foreign companies or governments in the Japanese bond market.
The issued Samurai bonds have maturities of 1 year, 1.5 years, 2 years, and 3 years, with amounts of 6.3 billion yen, 1.6 billion yen, 6.1 billion yen, and 6.0 billion yen respectively. They were issued in a total of five tranches, including a guarantee from SMBC Bank. The issuance interest rates were fixed by adding spreads to the TONA rate for each period: 105bp for 1 year, 133bp for 1.5 years, 145bp for 2 years (40bp for the SMBC Bank guaranteed tranche), and 210bp for 3 years, resulting in rates of 1.04% (1 year), 1.36% (1.5 years), 1.53% (2 years), 2.25% (3 years), and 0.48% (guaranteed 2 years). The bond issuance was solely underwritten by the Japanese securities firm SMBC Nikko.
Korea Investment & Securities, the first Korean securities firm to issue Samurai bonds, earned the title of being the "only securities firm to issue foreign currency bonds other than the dollar" along with the successful public offering. The funds raised will be used for local investments in Japan.
A Korea Investment & Securities official said, "This has served as an opportunity to promote the Korean securities industry in the Japanese market and to be recognized for excellent profitability and stability," adding, "We plan to accelerate overseas business by diversifying funding currencies and strengthening funding stability."
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Korea Investment & Securities debuted in the public Korean bond market by successfully issuing Eurobonds (RegS) worth 600 million dollars in June 2021. By strengthening cooperation with local subsidiaries and focusing on global investment banking (IB) business, Korea Investment & Securities is also building successful results in the Korean bond market, which has been considered a barren land for domestic securities firms.
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