"Achieving the Lowest Spread Ever"
IBK Industrial Bank of Korea announced on the 21st that it successfully issued Kangaroo bonds worth 700 million Australian dollars (approximately 641.5 billion KRW) on the 20th. The bank emphasized that this is a significant achievement that dispelled concerns of overseas investors about Korean bonds despite the impeachment political turmoil.
Kangaroo bonds are bonds issued by foreign institutions in Australian dollars in the Australian capital market.
They were issued in the form of social bonds. The interest rate is set at the 3-month Australian dollar swap rate (Bank Bill Swap Rate) plus 0.76 percentage points (p). This is the lowest spread ever for a 5-year Kangaroo bond issued by a domestic issuer.
An IBK Industrial Bank of Korea official explained, "This is 5 basis points (bps, 1bps=0.01 percentage points) lower than the spread on bonds recently issued by major Australian banks," adding, "It resulted in a cost saving of more than 5bps compared to issuing in US dollars."
The bank reported strong interest from global high-quality investors. Orders exceeding 4 billion Australian dollars (approximately 366.5 billion KRW), which was the target issuance amount, by more than 10 times, totaling over 40 billion Australian dollars (approximately 3.665 trillion KRW), were placed mainly by SSA (government, international organizations, institutions) investors. This is the largest scale of Korean bonds in the Kangaroo bond market to date.
Thanks to robust investment demand, the issuance size was increased to 700 million Australian dollars, marking the best performance ever.
An IBK Industrial Bank of Korea official said, "In a situation where volatility in domestic and international financial markets continues, we returned to the Australian market after three years to diversify funding sources," adding, "This issuance is significant as it confirmed the solid position of Korean bonds in the cross-currency market."
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