South Korea’s lending major KB Kookmin Bank raised $300 million in three-year sustainability bond at relatively favorable condition on heated demand.
The bank said Tuesday that it secured $300 million in three-year sustainability senior debt at a coupon yield of 3.763 percent, 80 basis points over the U.S. Treasury note yield of the corresponding maturity. The proceeds from sustainability bonds must be used exclusively to finance environmental and social projects.
The debt offering was co-led by Crédit Agricole CIB, HSBC, and Mizuho. KB Securities also took part as a co-manager.
The bank’s first tapping into the burgeoning socially-responsible market drew overwhelming subscription of $1.9 billion from 138 institutional investors from across the world. By region, Asian investors accounted for 71 percent of the total and the European investors 29 percent. By investor type, asset management firms represented 68 percent of the total, followed by banks with 24 percent, central banks and sovereign wealth funds 5 percent, and others 3 percent.
It is the first dollar-denominated debt offering since the Korean government issued foreign exchange stabilization bonds, which serve as a benchmark for private-sector Korean borrowing in foreign currencies, at a favorable condition last month.
A KB Kookmin Bank said the bank has a strong business record and good credit ratings (A1 stable by Moody’s Investor Service; A+ stable by Standard & Poor’s; A stable by Fitch Ratings), which have helped the lender successfully issue the sustainability bond for the first time among Korean banks.
By Chung Joo-won and Cho Jeehyun
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