South Korea’s Kookmin Bank has successfully raised $500 million from its issuance of global bonds under RegS/144a format.
Those so-called corona bonds are intended to provide a financial support to deal with the economic ramifications from the coronavirus outbreak. This is the first time Asian non-governmental organization has sold corona bonds in a public offering.
Kookmin Bank announced and started marketing its global bond issue in Asian markets on April 23. The offering included fixed rate notes (FXD) with five-year maturity. The initial price guidance was set at 195 basis points over the five-year U.S. Treasury.
The offering attracted more than $3.9 billion in orders from 181 institutional investors. Thanks to strong demand, the bonds were priced to yield 150 basis points more than five-year U.S. Treasury, tighter than the initial price guidance.
The company took orders from investors in Asia, Europe and the U.S. Seventy percent of the issuance were allocated to Asian investors, followed by the U.S. (19 percent) and Europe (11 percent).
The lender plans to use the proceeds to provide financial support in relation to the outbreak of the coronavirus, of which more than 90 percent will be used to support small and mid-sized companies. The bonds are issued in the form of sustainability bonds.
The World Bank recently issued a pandemic bond designed to provide emergency pandemic resources. Kookmin Bank’s latest issuance marks the first corona bonds sold in the Korean paper market. Korean paper refers to foreign currency debt issued by South Korean entities abroad.
BOA Merrill Lynch, Citigroup Global Markets Securities, HSBC, Commerzbank, Standard Chartered and Societe Generale acted as joint bookrunners. (By reporter Pi Hye-rim)