Large, Distinctive Green FRN Sparks Investor Interest in Korea's Top Senior Euro Deal
The Export-Import Bank of Korea (KEXIM) has made history with a significant bond issuance on the European market. On May 17th, KEXIM priced a €1.5 billion euro benchmark bond, marking the largest-ever senior unsecured public euro bond transaction from Korea.
The financing instrument for the transaction was the Export-Import Bank of Korea itself. The transaction was led by multiple financial institutions, with Citi serving as a joint bookrunner and lead manager, alongside other institutions such as J.P. Morgan, Crédit Agricole CIB, HSBC, Korea Investment & Securities, and KB Securities.
The bond consists of two tranches: €550 million 2-year green floating rate notes and €950 million 3.5-year fixed rate notes. The shorter 2-year green floating rate notes attracted significant investor interest during the book-building process, reflecting the current interest in shorter-term, green financing options.
The issuer focused on providing liquidity for the shorter tenors instead, and despite substantial demand for the 7-year tranche, the issuer decided to drop the longer tranche from the offering. This decision was likely influenced by the current rates environment, which favours shorter-term bonds.
Founded in 1976, the Export-Import Bank of Korea is Korea's official export credit agency, fully owned by the Government. As such, it plays a crucial role in supporting Korean exports and promoting economic growth.
This bond issuance is yet another testament to the Bank's strong standing in the global financial market, and its commitment to sustainable financing. The Export-Import Bank of Korea continues to lead the way in green financing, with the shorter 2-year green floating rate notes being a unique addition to the transaction.
In conclusion, the successful issuance of this €1.5 billion euro benchmark bond by the Export-Import Bank of Korea highlights the Bank's strong position in the global market and its commitment to sustainable financing. The high demand for the shorter green floating rate notes also underscores the current interest in shorter-term, green financing options.
