The Export-Import Bank of Korea (KEXIM) is planning to sell up to $3 billion worth of new global bonds this week, tipped to be the largest-ever bond issue by a non-governmental entity in South Korea.
They will be offered in the US, Europe and Asia and carry maturities of three, five and 10 years, according to investment banking sources on Jan. 4.
The size and terms of the new offering will be determined on Jan. 6, after bookbuilding is completed on Jan. 5.
They will likely mark the largest-ever offering by a domestic entity, excluding the $4 billion sovereign bond sale by the South Korean government in 1998 at the height of the Asian financial crisis.
The planned size of the bond sale is double the $1.5 billion the state-run lender raised from a global bond issue a year earlier.
KEXIM wants to raise as much as it can from the new issue before interest rates go up. Financial markets are bracing for the US Federal Reserve's first interest rate hike in three years in March at the earliest.
To drum up interest in the new issue, KEXIM will sell the 10-year note as a green bond incorporating environmental, social and governance themes.
Early in 2021, its 10-year bond was sold at 1.6% per annum, or 0.38 percentage points above the 10-year US Treasury yield, thanks to heavy demand.
KEXIM, as a state-run body, has equal credit ratings as South Korea's sovereign ratings, or AA by S&P. JPMorgan, Citigroup, BNP Paribas, HSBC, Daiwa, MUFG and KB Securities Co. are among joint bookrunners of the new issues.
KEXIM tends to issue the country's first overseas bonds every year, which have come to gauge market interest in South Korean debt and its bond yields serving as a benchmark for other Korean issues.
Korean Air Co. is preparing to raise about 30 billion yen ($260 million) in a new yen-denominated bond issue later this month.
Write to Hyun-il Lee at
hiuneal@hankyung.comYeonhee Kim edited this article.
