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Subordinated bond issues

Kookmin Bank sells $500 mn in subordinated bonds to fund ESG projects

By Oct 29, 2020 (Gmt+09:00)

South Korea’s Kookmin Bank has issued $500 million in subordinated bonds as part of its efforts to expand loans for environmental, social and governance (ESG)-themed projects.

Kookmin Bank said on Oct. 29 it plans to use the proceeds to support small- and medium-sized local businesses suffering from the fallout of the COVID-19 pandemic.

In the bookbuilding, the dollar bonds received orders worth more than $2.6 billion from 135 institutions. The overwhelming demand allows Kookmin Bank to issue the bonds at a 0.3 percentage point lower yield than it had planned.

Kookmin Bank sells 0 mn in subordinated bonds to fund ESG projects

The bank said the 10-year subordinated bonds will be issued with a 2.518% annual yield, which is 1.75 percentage points higher than the 10-year US treasury note. The bonds will trade on the Singapore Exchange.

“The successful bond issue reflects Korea’s sovereign rating and Korean banks’ high credibility in the volatile global financial market amid the resurgence of the COVID-19 pandemic,” said a Kookmin Bank official.

BNP Paribas, BofA Securities, Citi Group, Mizuho Bank, Mitsubishi UFJ Financial Group (MUFG) and Standard Chartered PLC handled the global bond sale. KB Securities Co. and its Hong Kong branch co-managed the sale.

Kookmin Bank’s subordinated bond issue follows its euro-denominated covered bonds issued in July, the first of its kind among Korean banks.

Write to Hyun-il Lee at hiuneal@hankyung.com

In-Soo Nam edited this article.

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