Korea Development Bank (KDB) has raised $750 million by selling U.S. dollar-denominated bonds overseas. The issue was KDB’s first 10-year bond issuance in nine years and one of Korea’s few quasi-sovereign 10-year credits.
The deal marks the first debt issue from Korea after the sovereign’s recent upgrade from A1 (positive) to Aa3 (Stable) by Moody’s.
With 3 percent coupon, the Seoul-based organization achieved the lowest print seen from a Korean FIG issuer at the ten-year point since 2001.
The issue was significantly oversubscribed, with the final orderbook standing at $2.2 billion from 150 accounts. Asian investors accounted for nearly half of the bond buyers, while those from the United States and Europe took up 26 percent, respectively.
RBS acted as Joint Bookrunner and Joint Lead Manager for this milestone transaction. After the transaction in February 2012 this deal marked RBS’s second consecutive U.S.-dollar bond issuance for the Korean bank.
“We have built a solid relationship with KDB and this has now been our fifth global offering for KDB since 2007,” comments Gale Park, Associate in RBS’s Debt Capital Markets team in Korea.
Since its establishment in 1954, KDB has been the leading bank in Korea mainly focusing on the provision of long-term financing for projects designed to assist Korea’s economic growth and development. Additionally KDB offers broader corporate, investment and retail banking. When KDB turned to RBS for a global bond issuance in the second half of 2012, the state-run bank was looking to secure funds for project financing loans and to refinance its existing bonds, as well as securing a buffer against the fiscal problems in the U.S. and the eurozone. In February 2012, KDB had already raised $750 million via a five-year bond. Given KDB’s government backing solid financials, it elected to issue a ten-year bond, moving away from the crowded five-year space whilst diversifying its investor base. It was the first time in nine years that the bank issued 10-year debts, raising $750 million by selling US dollar-denominated bonds overseas.
As a leader in local corporate financing, KDB Bank plays an important role in economic development in South Korea. The main areas of its business are corporate financing, investments, bond issue and financial consulting.
KDB became a private entity in 2009 and was transformed into a financial holding company under the name KDB Financial Group. As a member of the Group, KDB Bank itself operates with 2,630 employees.
Its network consists of 64 local and eight overseas branches, five overseas subsidiaries and four overseas representative offices worldwide.
KDB Bank has a European branch in London, two European subsidiaries in Hungary and Ireland and a representative office in Germany, Frankfurt. According to the vision of its parent company, which aims growth and expansion in CEE region, KDB Bank Europe opened Slovak Branch in 2013.
KDB's main vision is to become one of the 50 most powerful global financial groups.
_산은 본사.jpg)
A view of the KDB Building in Yeouido, downtown Seoul where KDB Financial Group affiliates including Korea Development Bank have offices.
_산은 홍기택 03.jpg)
