이 기사는 2021년 05월 17일 07:44 thebell 에 표출된 기사입니다.

Foreign-currency bond sales by South Korean issuers have been met with strong demand from institutional investors this year amid abundant liquidity in the global financial markets.

SK Battery America, the US subsidiary of SK Innovation, in January raised $1 billion in its first euro bond sale. Naver and Hyundai Motor’s Indonesian subsidiary also secured millions of dollars in their first euro bond sales.

Debut issuers typically offer extra spread to attract investors. However, the three South Korean issuers, rated A by global credit ratings agencies, only paid the yields similar to those of equivalent bonds in the secondary market as the offering were oversubscribed.

Strong demand for foreign currency-denominated bonds, commonly known as Korean paper, is largely attributable to low supply in the past years, market watchers noted. “A recent increase in Korean paper issuance, especially by companies in the private sector, is attracting interest from global institutional investors,” a source said.

In the public sector, Incheon International Airport Corporation paid 52.5 basis points more than the yield on equivalent US Treasury debt in a five-year dollar-denominated bond offering last month, with the spread recently falling to the mid to upper 40 basis points. Korea Expressway Corporation’s five-year dollar-denominated bond was also priced at 47.5 basis points over the US Treasury benchmark during the book building process earlier this month.

Woori Card and KB Kookmin Card also made their debut in the Korean Paper market this year, raising $200 million and $300 million respectively. Their order books were oversubscribed.

Global institutional investors see Korean papers as a relatively safe investment, industry watchers said. South Korea is rated AA by global ratings agencies. The country’s issuers have been steadily raised funds from global bond markets for more than a decade, which helped gain trust from investors.

When Asian bonds were hit last month by heightened financial stability risks surrounding China Huarong Asset Management, Korean papers were less impacted with the spread moving in the range of 1-2 basis points.

Lower borrowing costs are expected to make more South Korean issuers turn to the Korean paper market, rather than raise money at home. Shinhan Financial’s 500 million Additional Tier 1 bond was priced at a yield of 2.875%, the lowest ever, in the book building process earlier this month, while bonds with similar terms issued in the domestic market were priced to yield more than 3%. (Reporting by Hye-rim Pi)