Sooeun Issues $2 Billion Global Bonds... "Korean Financial Institution's First 20-Year Bond"

Korea Economic Confirms Solid Newcomer
Demand Drives Issuance Size Up by $500 Million
SUEC Plans Total $11 Billion Foreign Currency Fundraising This Year

[Asia Economy Reporter Kim Jin-ho] The Export-Import Bank of Korea announced on the 25th that it has successfully issued a total of $2 billion in global bonds targeting investors worldwide.

The bonds consist of a triple tranche structure with fixed interest rates: $750 million with a 3-year maturity, $750 million with a 5.5-year maturity, and $500 million with a 20-year maturity. The issuance yields include a spread of 0.20 percentage points, 0.35 percentage points, and 0.50 percentage points added to the U.S. Treasury yields for 3-year, 5-year, and 20-year maturities, respectively.

This global bond issuance includes, for the first time among Korean financial institutions, a long-term bond with a 20-year maturity. Previously, the longest maturity for bonds issued by the bank was 10 years.

An official from the bank evaluated, "The successful public issuance of the 20-year long-term bond is significant as it reconfirms the sound external creditworthiness of the Korean economy and the bank among global investors."

The bank is analyzed to have completed the yield curve (a graph showing the relationship between bond maturities and interest rates, used as a basis for determining lending and borrowing rates by financial institutions) across short and long terms through the successful issuance of the 20-year bond. This provides a basis for the bank to calculate competitive rates reflecting market conditions when Korean companies participate in overseas large-scale projects requiring long-term financing of over 10 years.

On the day of issuance, orders for the global bonds reached approximately $5.4 billion, 3.6 times the initial target of $1.5 billion, leading to an expansion of the issuance size to $2 billion. Despite the global spread of COVID-19, the relatively robust fundamentals of the Korean economy were highlighted due to the strong performance of key export markets such as shipbuilding, semiconductors, and batteries.

The bank plans to diversify its borrowing methods and actively attract high-quality investors to achieve a total foreign currency procurement target of $11 billion this year, striving for stable external debt financing.