Korea Investment raises $400 mn to expand US assets

Seoul-based brokerage firm Korea Investment & Securities Co. (KIS) has raised $400 million in new bonds to strengthen its investments in the US amid growing uncertainty in global financial markets.

The three-year bonds will be issued with rates of 235 basis points higher than those of US three-year Treasury bonds, KIS said on Tuesday. The issuance will be managed by Citigroup Inc., The Hongkong and Shanghai Banking Corporation Ltd. (HSBC), Natixis SA and KIS Asia Ltd.

The issuance follows KIS’ first dollar bond issue in 2021, which was worth $600 million. 

KIS has increased the issuance from $300 million to $400 million as about 170 global institutional investors have signed up for $2.7 billion worth of bonds in the subscription process.

The brokerage house has been active in foreign currency bond issuance this year, including 20 billion yen worth of Samurai bonds in July, in preparation for financial market volatility.

The firm issued 180 billion won in public bonds on Oct. 17. The notes are comprised of 110 billion won in bonds with a three-year maturity at a 5.175% rate and 70 billion won in bonds with a two-year maturity at a 4.874% rate.

The bond rates were higher than the average of Korean bond rating firms’ consensus as investors showed tepid interest in brokerage firm debts amid growing project financing risk concerns.

KIS plans to use the new funds for US-based assets. The brokerage house is accelerating acquisition financing for US companies via SF Credit Partners, a leveraged lending joint venture it founded with Stifel Financial Corp. in September 2022.

Write to Hyun-Ju Jang at blacksea@hankyung.com

Jihyun Kim edited this article.