Kexim Prices Biggest-Ever Samurai Bond From Korean Borrower

Export-Import Bank of Korea sold 100 billion yen ($1.2 billion) of Samurai bonds, a record offering of such notes from a Korean borrower.

The sale includes 51.4 billion yen of 1.11 percent two-year bonds priced to yield 70 basis points more than the yen swap rate and 41.2 billion yen of 1.25 percent notes due in three years yielding 83 basis points more than the benchmark, according to data compiled by Bloomberg. The state-owned lender known as Kexim also offered 7.4 billion yen of 1.38 percent Samurai notes due 2017 at a spread of 90 basis points.

Samurai bonds, as securities sold in Japan by foreign issuers are known, are attracting investors seeking higher returns after the yield on benchmark 10-year government debt tumbled yesterday to match the lowest since 2003. Bond buyers are favoring notes sold by issuers that aren’t from the U.S. or Europe after government-formation talks by Greek leaders collapsed and JPMorgan Chase & Co. disclosed a $2 billion trading loss, according to Nomura Securities Co.

“Many investors seem to have bought the Kexim Samurai after a process of elimination,” Kyoko Kaji, a Tokyo-based credit analyst at Nomura, said in a telephone interview today. “Most U.S. and European borrowers are not in a position to sell new Samurai bonds in the current environment.”

Kexim doubled its sale amount from 50 billion yen “because of high demand,” according to a statement from the lender today.

The deal is the biggest-ever Samurai bond offering from a Korean borrower, breaking the record set by Kexim when it sold 80 billion yen of Samurai debt in June, according to data compiled by Bloomberg.

That sale included 58.4 billion yen of 0.93 percent two-year securities priced to yield 50 basis points more than the yen swap rate, 20 basis points less than the similar-maturity notes that Kexim sold today, the data show.

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