Korean Bank Issues Record Euro-Denominated Covered Bond
KB Kookmin Bank has made headlines in the financial world by issuing the largest euro-denominated covered bond ever issued by a South Korean commercial bank. The bank announced on September 15 that it had raised $750 million through a four-year sustainability covered bond, with a coupon rate of 3.625 percent and priced at 24 basis points above the four-year euro mid-swap rate.
The strong institutional demand for the bond was attributed to its attractive pricing, despite the current market uncertainties caused by investor fatigue following a wave of bond issuance since August and interest rate hikes by the European Central Bank. Expectations for U.S. interest rates have also risen, adding to the global financial market uncertainties.
KB Kookmin Bank has been actively participating in the euro covered bond market since 2020, when it became the first Korean commercial bank to issue a covered bond. This year's issuance marked its fifth consecutive year of issuing benchmark bonds in the euro covered bond market.