Asia's G3 bond markets return to action

Woori Bank is lining up a subordinated-debt issue, while Industrial Bank of Korea, GS Engineering & Construction, Lotte Shopping, KDB and Hong Leong Bank are waiting in the wings.

After a short break in February, Asia's G3 bond markets are alive and kicking once again. March is expected to be a busy month after three Korean banks mandated deals and several Korean companies took to the road to meet investors.

Woori Bank plans to raise about $500 million of subordinated debt, arranged by a group of seven banks: Bank of America Merrill Lynch, Barclays Capital, BNP Paribas, HSBC, J.P. Morgan, UBS and Woori Securities. The deal is currently in "execution mode", according to one banker. The funds raised will likely be used to refinance maturing debt.

Meanwhile, Industrial Bank of Korea has hired BNP Paribas, Citi, Morgan Stanley and Royal Bank of Scotland for a potential US dollar bond that is slated to launch in March.

Korea Development Bank (KDB) has mandated Bank of America Merrill Lynch, HSBC, KDB Asia, Royal Bank of Scotland, Standard Chartered Bank and UBS for an upcoming benchmark dollar bond. KDB is expected to be the first of the Korean banks to tap the bond market, as early as today, while Kexim is rumoured to have lined up a similar group of international banks (excluding KDB Asia) for a bond sale, which it is expected to launch in April.

Besides the Korean banks’ issuance, a number of Korean companies met investors in February on a series of non-deal roadshows and are expected to tap the market soon.  "We've seen the Korean banks issue every year, but this time there are some Korean companies looking to tap the bond market, including debut borrowers, which should be more interesting," said one banker.

These new borrowers include Korean builder GS Engineering & Construction, a subsidiary of the Korean conglomerate GS Group, which completed a non-deal roadshow last week arranged by Barclays Capital, Citi, Deutsche Bank and HSBC. If the deal happens, it will be the first Korean construction company to tap the market in a long while.

Lotte Shopping also completed a non-deal roadshow a few weeks ago, arranged by Barclays Capital and Citi.

Away from Korea, Hong Leong Bank will be holding a series of investor update meetings on March 3 in Singapore and March 4 in Hong Kong. Barclays Capital, Royal Bank of Scotland and Standard Chartered Bank will be hosting the meetings. Hong Leong Bank is a publicly-listed company on the Malaysian stock exchange and a member of the Hong Leong Group.

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