Lead manager JPMorgan begins marketing today for a $200 million 10 non-call five offering by Woori Bank. This represents the first time that Woori has accessed the market in its own name following the jumbo re-capitalization bonds undertaken by Hanvit Bank in February 2000 prior to the bank's re-organisation under the Woori umbrella.
The deal, which is being launched by the bank rather than the holding company, is expected to price either Wednesday or Thursday, following the completion of one-on-ones in London. Woori is expected to benefit from its status as the second largest financial grouping in Korea and investor familiarity with the credit.
Those that purchased the original lower tier 2 deal, also led by JPMorgan, have made a significant amount of money in the interim period, since the March 2005 transaction is now yielding about 3.6% compared to 11.75% at launch.
Crucially, the new deal will have an investment grade rating from Moody's given the agency's policy of placing subordinated debt one notch below senior. This means the new deal will have a Baa3 rating compared to the Ba1 subordinted debt ratings of both KorAm Bank and Korea First Bank (KFB).
Both KFB and Woori are rated BBB-/stable by Standard & Poor's, while KorAm does not have a rating.
KFB and KorAm have each issued sub debt this year, although in the case of KFB, it was an upper rather than lower tier 2 deal. KorAm was the most recent, raising $165 million via house bank Citigroup last Wednesday. The deal was priced with a coupon of 4.68% to yield 260bp over Treasuries.
KFB came in March with a 5.75% March 2008 transaction that was yielding 5.21% or 309bp over Treasuries during Asian trading Friday.