IBK, Issues $800 Million Global Bonds... Largest Ever

Record High Issuance Volume... Achieved Lowest Spread
Domestic First Bond Emphasizing Diversity and Inclusion Values

IBK Industrial Bank announced on the 24th that it successfully issued $800 million worth of social bonds in the global bond market.

This public bond issuance was the largest scale since IBK's global bond issuance, achieving various records such as issuance volume, issuance interest rate, and the first-ever attempt in Korea to link with Diversity & Inclusion, making it a meaningful issuance.

IBK attracted active participation from diverse investors ahead of the interest rate cut cycle through a dual-tranche strategy consisting of a 3-year floating rate note (FRN) and a 5-year fixed rate note (FXD). As a result, it set a new record for IBK's overseas bond issuance with an unprecedented order amount of $4.6 billion (5.8 times oversubscription).

Based on strong investor demand, the issuance interest rate was also reduced. The 3-year floating rate note (FRN) was priced at SOFR plus 62bps, and the 5-year fixed rate note (FXD) was priced at the U.S. 5-year Treasury yield plus 57bps, achieving a negative new issue premium (NIP) about 3bps lower than the fair value. In particular, the spread over government bonds for the 5-year fixed rate note (FXD) was the lowest since IBK began issuing foreign currency bonds.

Additionally, IBK issued a new type of social bond with the participation of an institution meeting Diversity & Inclusion criteria as a co-manager for the first time in Korea, which led to additional investor demand. During the issuance process, IBK explained to investors its various programs and inclusive finance support commitments for marginalized groups such as foreign workers, multicultural families, and people with disabilities, solidifying its position as a leading ESG bank.

An IBK official stated, “We were able to expand the base of quality investors and achieve a successful issuance through IR targeting central banks and international organizations worldwide,” adding, “We will continue to fulfill our responsibilities as a policy financial institution by timely raising funds to support small and medium-sized enterprises and socially vulnerable groups.”