Barclays, Citigroup, Deutsche Bank and Morgan Stanley have been mandated to lead a proposed dual currency $1 billion benchmark bond deal for the Export Import Bank of Korea (Kexim). The deal is expected to be completed after Chinese New Year.
This deal is somewhat reminiscent of Kexim's initial international debt market offering of 2005, a $1 billion dual tranche global bond that came to market in mid March.
After accumulating an order book of $1 billion, the $400 million five-year tranche priced to yield at 4.713%, a launch spread of 58bp over Treasuries and 28.125bp over Libor. The $600 million 10-year tranche attracted an order book of $1.3 billion and priced to yield at 5.157% a launch spread of 79bp over Treasuries or 38.5bp over Libor. At the time, this represented the tightest ever pricing by a Korean entity in the five and 10 year space. Barclays, Citigroup and Credit Suisse First Boston were the lead managers.
The new deal will hope to emulate the success of Kexim's most recent deal, a $500 million five-year FRN priced in mid-November. That deal priced at 24bp over Libor, becoming the first Korean issuer to break through the 25bp barrier. Credit Suisse, HSBC and UBS led the deal.
It is currently bid at about 23bp over.
Based on Kexim's typical annual financing requirements and its upcoming redemption schedule in 2006, it is expected that the quasi-sovereign will seek to raise upwards of $3 billion in issuance from the debt capital markets this year.