KB Kookmin Bank issues €500 mil of covered bond The issuance draws strong response thanks to appetite for safe-haven assets
Translated by Kim So-in 공개 2021-10-18 07:57:39
이 기사는 2021년 10월 18일 07:52 thebell 에 표출된 기사입니다.
South Korea’s KB Kookmin Bank has successfully raised 500 million euros (686.5 billion won) through an issuance of five-year euro-denominated covered bonds thanks to heightened demand for safe-haven assets.The lender will issue the covered bonds on October 19 after drawing $1.1 billion in bids during the book building process on October 13.
Strong response from institutional investors marked a stark contrast to the weakening investor sentiment in the senior debt market. Recently a dampened investor sentiment has been observed in the global bond markets due to increased interest rate volatility and rising credit risks from China.
KB Kookmin Bank has benefited from investors’ appetite for safe-haven assets amid the markets’ wild volatility. Covered bonds are debt instruments secured by a cover pool of mortgage loans (property as collateral) or public-sector debt to which investors have a preferential claim in the event of default. KB Kookmin Bank’s covered bond is rated AAA by S&P, four notches higher than the lender’s A+ rating.
The bank’s green covered bond issue is the first of its kind among Korean firms. Euro-denominated covered bonds have largely been issued in a social bond format so far. The lender plans to spend the proceeds on the eco-friendly business.
The yield on the covered bonds is based on a spread of 14 basis points above the euro mid-swap rate, a reference rate. It is below KB Kookmin Bank’s proposed spread of 18 basis points, thanks to heavy demand.
BNP Paribas, Citi Global Markets Korea Securities, Credit Suisse, ING Securities, JP Morgan, and KB Securities handled the bond sale. (Reporting by Hye-rim Pi)
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