Export-Import Bank of Korea made an opportunistic outing to the euro market this week to raise €1.5bn ($1.57bn), printing the largest euro-denominated senior bond from the country.
The policy bank’s 144A/Reg S senior unsecured trade was split into a €550m two year green floating rate note priced at 15bp over three month Euribor (or discount margin) and a €950m 3.5 year fixed rate bond priced at 20bp over mid-swaps. While the floater was issued at 101.731, the fixed notes were sold at 99.795 and pay a coupon of 1.375%.
The South Korean lender, which last visited the bond market in January with a $3bn deal, announced the mandate last Thursday. It was initially laying the groundwork for a 3.5 year and seven year fixed tranches, while the two year green FRN was based on reverse inquiry.
Global investor calls followed in Europe on Monday and in Asia on Tuesday, with books opening the same day at the London open.
The FRN was offered at the 20bp area while the 3.5 year and seven year fixed portions were offered at 25bp and 45bp over mid-swaps areas, respectively.
But unforeseen demand for the FRN, coupled with solid traction for the 3.5-year fixed portion, led to the decision to drop the seven year. This was in line with Kexim's fundamental goal to minimise duration, said one of the lead managers on the deal on Thursday.
Citi, Crédit Agricole, HSBC, JP Morgan, KB Financial, Korea Investment & Securities and Natixis are the lead managers on the trade, which was run from the London desks. Kexim UK was a co-manager.
Attracting demand
The green FRN saw orders in excess of €655m from 30 accounts. By region, Europe, the Middle East and Africa took 90% of the bond, with Asia and the US taking 5% each. The orders included 14 orders from ESG investors with a green share of 82% on final allocations, according to the lead manager.
Official institutions/sovereigns, supranationals and agencies took 71% of the FRN, banks got 11%, asset managers 10%, and insurance/pension funds 8%.
For the 3.5 year fixed tranche, books crossed €1.1bn from 46 accounts. EMEA took 85% of the notes, Americas 10% and Asia 5%. Official institutions/sovereigns, supranationals and agencies took 51% of the deal, banks 19%, insurance/pension funds 17% and asset managers 13%.
The notes will be rated Aa2/AA/AA-, on par with Kexim.
Proceeds of the fixed notes will be used for general corporate purposes. The FRN will go towards eligible green projects.