korails-bonds-tighten-in-secondary-trading

Korail's bonds tighten in secondary trading

Another Korean quasi-sovereign attracts strong interest and performs well in the aftermarket.
Korea Railroad Corporation Korail priced a $300 million five-year 144A deal last Thursday through Citi, HSBC and Morgan Stanley, marking its debut in the international bond market. The bonds priced at the tight end of guidance released on Wednesday at 160bp-170bp over mid-swaps, giving a spread over Treasuries of 237.7bp.

In terms of comparables, the Korean sovereignÆs 2013s were trading at 155bp130bp over Treasuries, while Korea Development BankÆs bonds were trading at 210bp195bp over Treasuries. The bonds priced 10bp inside similarly-rated Korea Southern Power Kospo and Korea Midland Power Komipo, which were also thought to be relevant comparables. These were both trading at 245bp240bp over Treasuries.

Despite seemingly aggressive pricing, the...
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