Solid response to KookminÆs $400 million bond

$1.1 billion of demand greets the first international bond offer by a Korean commercial bank in 2007.
Investors have snapped up a $400 million five-year floating-rate note from Kookmin Bank despite a razor thin margin. Indeed, demand was so strong that Kookmin was able to up the size of the deal and raise an extra $100 million.

Kookmin last tapped the offshore bond markets at the end of November with a $300 million five-year floater that priced at 29bp over Libor. At the time, it was the tightest pricing ever for a Korean commercial bank, but WednesdayÆs deal priced considerably tighter.

The joint lead managers û Banc of America, Barclays Capital and BNP Paribas û announced the deal on Monday with pricing guidance of 26bp, but squeezed the range down to 23-24bp and eventually priced at just 23bp, the tightest pricing ever achieved by a Korean commercial bank on a five-year bond.

The price on KoreaÆs government policy bank debt throws a very favourable light on the Kookmin deal: Korea Development Bank is trading at 28bp and Industrial Bank of Korea is at 27bp. Even KookminÆs November bond is up at 25bp.

The deal priced at par and is rated A3 by MoodyÆs and A- by Standard & PoorÆs, and is issued off KookminÆs $4 billion MTN programme.

Based on the initial announced size of $300 million, the order book closed heavily oversubscribed at the $1.1 billion level, with participation by 48 accounts. By geography, 57% went to Asia and 43% to Europe.
¬ Haymarket Media Limited. All rights reserved.
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