Kookmin Bank, a unit of KB Financial Group, raised $700 million in foreign exchange bonds on Tuesday, signaling a recovery in investor sentiment toward Korean debts.
As global investors warmed up to Korean bonds amid a temporary easing of trade tensions following a 90-day reprieve on US reciprocal tariffs, Tongyang Life Insurance Co. also returned to the global primary bond market for the first time in five years.
The largest bank in South Korea said it sold the bonds in two tranches — $400 million with a three-year tenor and $300 million with a five-year maturity – at coupon rates of 4.495% and 4.677%, respectively.
With the bonds oversubscribed by 13 times, Kookmin was able to lower their interest rates by about 0.41 percentage points. The proceeds will be used to refinance five-year debts maturing in May.
The bond issuance followed a nearly threefold rise in its first-quarter net profit, which surged to 1.07 trillion won ($747 million) from the same period of last year.
On Monday, Tongyang Life Insurance Co. raised $500 million in five-year subordinated bonds, exceeding its initial target of $300 million. The offering was 12 times oversubscribed, attracting $3.6 billion in bids.
The new bond sales marked a reversal in sentiment toward Korean bonds, which had been largely shunned until early this month.
Washington’s tariff hikes and political uncertainty following the ousting of former South Korean President Yoon Suk Yeol due to his ill-fated martial law decree had pushed up the risk premium on Korean debts.
On April 7, Shinhan Bank, the country’s No. 2 lender, cancelled a forex bond sale due to lackluster demand, prompting Kookmin to reconsider its own timing for tapping the global bond market.
Shinhan Bank is making a new attempt to raise $500 million in the global bond market in May.
On Monday, POSCO Holdings Inc., the parent of steelmaker POSCO Co., also issued $700 million worth of green bonds to global investors — $400 million in five-year notes and $300 million in 10-year paper – at lower coupon rates than initially proposed.
By Hyun-Ju Jang
blacksea@hankyung.com
Yeonhee Kim edited this article.
