Choi Sung-hwan, the chief financial officer of Export-Import Bank of Korea (Kexim) controls the reins of one of Asia’s biggest funding machines. The Seoul-headquartered policy bank raised about $11 billion from debt markets last year, making it one of Asia’s most prolific borrowers and a trendsetter for a swath of Korean companies that tap debt markets.
Choi, a self-described “funding guy”, became CFO last year, after more than three decades at the bank, when the tenure of his predecessor Kim Yoon-Yung ended.
Kexim lends to Korean exporters and provides import finance, greasing the wheels of South Korea’s export-led economy. The state-owned bank also extends loans for overseas investments, supporting Korean conglomerates as they make a push into such far-flung places as Uzbekistan and Morocco, be it to develop power plants or other infrastructure.
The policy bank’s need for funds has kept pace with the growth in South Korea’s economy, rising five-fold from $2.2 billion in 2006 to $11 billion last year — and this has encouraged it to borrow in a broader range of markets. Last year alone, Kexim tapped 25 different currencies, including the Brazilian real, South African rand, Russian rubles and Turkish lira. In March, it tapped the sterling market for the first time.
“Our total size of funding has been growing, and to get that kind of size and achieve competitive pricing, we have no choice but to diversify our funding sources,” says Choi. “We want every market we can get.”
Choi and his cadre of bankers meet with investors regularly, and take calls from debt bankers on a daily basis, keeping an eye on market conditions, funding levels and, importantly, where the swap market is throughout the globe. In today’s volatile conditions, choosing to tap the market at the right time can make a world of difference in how much a borrower has to pay.
Kexim’s recent financing conference held in Hong Kong in February gathered a who’s who of the debt banking world, with department heads from all the major banks attending — testament to the policy bank’s pre-eminence within the debt capital sphere.
“Kexim had one of the biggest collections of debt capital markets and syndicate bankers I have seen at its conference,” said one debt head who attended the conference.
The conference is a venue for the bank to hold an open dialogue with banks, exchange ideas and plot its strategy for the year. Such contacts enable it to remain nimble, despite its size.
“We monitor the market every day,” says Choi. “The door is open every day. Every investment bank knows what Kexim is considering and they provide us with proper recommendations in terms of size and currency.”
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