KB Kookmin Bank Issues 500 Million Euro Overseas Covered Bonds

"Stable Foreign Currency Procurement in High Interest Rate Periods"

KB Kookmin Bank has issued overseas covered bonds (dual recourse bonds) worth 710 billion KRW.

On the 6th, KB Kookmin Bank announced that it successfully issued a 3-year and 6-month maturity global covered bond worth 500 million euros (approximately 710.9 billion KRW) the previous day.

Covered bonds are dual recourse bonds issued with high-quality assets such as mortgage loans held by financial institutions as collateral. Legislated covered bonds legally guarantee dual recourse rights, allowing bondholders to exercise repayment claims against the issuing company in case of default, as well as priority claims on the underlying collateral assets.

This is KB Kookmin Bank's fourth euro-denominated covered bond issuance following those in July 2020, October 2021, and June 2022. The issuance coupon rate was set at an annual 4.076%, which is the euro mid-swap (MS) rate plus 55 basis points (bp; 1bp=0.01%), and the bonds will be listed on the Singapore and Frankfurt stock exchanges.

The lead underwriters are BNP Paribas, Commerzbank, Cr?dit Agricole, HSBC, ING, and Soci?t? G?n?rale. Investors are composed of 86% from Europe and 14% from Asia by region. By institution type, asset management companies accounted for 55%, banks 13%, central banks and international organizations 30%, and others 2%.

A KB Kookmin Bank official stated, “In a market environment where the 10-year US Treasury yield has reached its highest level in 16 years, we raised foreign currency at competitive rates through the issuance of covered bonds, which are recognized as safe assets. Despite volatile market conditions, we secured a strong investor demand and achieved a new issuance premium (NIP) lower than the recent market average, solidifying our image as a leading covered bond issuer in Asia.”

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