KoFC plans benchmark US dollar bond by year-end

Korea's newest state-owned policy bank plans to launch its first foreign currency benchmark-sized bond issue later this year. Korea Finance Corporation (KoFC) set up a $10 billion euro medium-term note programme (EMTN) in April, and received a rating equal to the Korean sovereign from the leading rating agencies. It is expected to apply for registration by the Securities and Exchange Commission and preliminary documentation is likely to begin in July.

Executive director Bong-sik Choi headed a delegation from KoFc on a five-day non-deal investor roadshow to Hong Kong and Singapore last week. It was the second round of meetings since the bank was inaugurated in October 2009.

"Developing and cementing investor relations is important, as we build the infrastructure for future funding in the inter-bank, money and bond markets," Choi told FinanceAsia.

A global roadshow in December, which included visits to Europe and the US as well as Asia, was focused on explaining KoFC's structure, purpose and funding intentions to central banks, policy financial institutions and regulators.

"We are establishing a foundation for the future, and have already received a high level of approval from investors. In particular, investors have been very positive about Korea: the resilience and strength of its economy in the wake of the global financial crisis, the response of the government through fiscal stimulus and banking sector support, and the quality and financial health of the country's leading companies," said Choi.

The EMTN programme has been assigned the Korea foreign currency sovereign ratings of A1 (Moody's), single-A (Standard and Poor's), and A+ (Fitch).