SEOUL, South Korea--(BUSINESS WIRE)--The Export-Import Bank of Korea (“Korea Eximbank”), the government’s export credit agency, sold $400 million of 5-year bonds yesterday. As Korea Eximbank’s second green bond offering since the first one in 2013, the issue was priced early in the New York trading day and met strong demand from accounts across Asia, Europe and the US.
The bonds pay a 2.125% semi-annual coupon and were re-offered to investors at 99.745 to yield 2.179% to a maturity date of 11 February 2021. The yield was equivalent to 87.5 bps over US Treasuries.
The bank's deal was formally launched just after Asian markets opened on Tuesday morning with guidance set within the area of Treasuries plus 105bp area.
By late afternoon, the joint bookrunners, Bank of America Merrill Lynch and Crédit Agricole CIB had tightened final guidance to 90bp area +/-2.5bp over Treasuries.
The final order size was over $1.1 billion across 64 accounts (close to 3 times oversubscription). Asia was allocated 48%, European accounts bought 35% whilst US based accounts bought the remaining 17%. By investor-type, conventional asset managers took 40% of the deal, insurance 30%, banks 20% and central banks took 10%.
Korea Eximbank’s senior unsecured green bond was sold under the SEC-registered format and is rated Aa2 by Moody’s and AA- by both Standard & Poor’s and Fitch.
First issued by the World Bank in 2008, green bonds or socially responsible investing (SRI) bonds issuances have ballooned with the growing importance of the need for companies to have environmentally and socially sustainable policies. Over USD 36 billion was issued in 2014 and over USD 47 billion was issued in 2015. The market has diversified from Sovereign Supranational Agency / Financial Institution issuers in recent years with a slew of corporates issuances as well as a handful of high yield green bonds.
Previously, Korea Eximbank has issued a global green bond in early 2013 and became the first non- international financial institution in the world to successfully issue a global green bond. As the only green bond issuer out of Korea, Korea Eximbank intends to use the proceeds of the bond issue to support low-carbon, green sector exporters to power Korea’s future drivers of growth.
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