The A3/A-/A- senior unsecured five-year deal priced at the tight end of revised price guidance coming at par on a coupon of 36bp over 3 month Libor. Having initially released guidance to the market yesterday with a target yield of 37bp to 39bp over 3 month Libor, the leads cut guidance to 36bp to 37bp over on Thursday after the deal picked up considerable momentum during the roadshows.
Fees were 22 cents.
The deal was felt to offer fair value relative to the bank's outstanding curve. Its September 2010 fixed rate bond was trading at 86bp to 83bp over Treasuries, equivalent to 39bp over mid-swaps.
However that is slightly misleading because of the movement of the market. Treasuries have remained stable over the previous couple of sessions, while swaps have tightened slightly pushing the swap spread out. A day earlier, WooriÆs September 2010s were quoted at the 36bp over. Meanwhile, WooriÆs most recent deal a Ç300 million euro offering was trading at 35bp over swaps.
Woori's order book closed just over two times oversubscribed, coming just shy of $1.2 million, with participation from 73 accounts. By geography, 63% went to Asia, 27% headed to Europe and the remaining 10% went to US investors. By investor type, banks took the majority of the allocations with 79%, asset managers took 10%, and insurance companies took 10% and 1% went to others.
The deal was launched off the group's global MTN programme which enabled the deal to target a wider investor base.
Although Woori does not enjoy the explicit support of the Korean Government, WooriÆs financial strength is underpinned by its longstanding relationship with the central government.
Additionally as KoreaÆs third largest commercial bank it has very strong financial fundamentals. Indeed, its overall performance has improved and stabilised markedly since the 1997 financial crisis. Currently Woori operates 758 branches domestically and 17 overseas and has total assets of W162 trillion ($171 billion) on a consolidated basis.
Formerly operating as Hanvit Bank, Woori Bank was created from the merger between Commercial Bank of Korea and Hanil Bank. For the past five years, it has operated as a subsidiary of Woori Financial Group (WFG), Korea's largest financial holding company, accounting for about 87% of WFGÆs total assets.