Burned by China? Come to Default-Free Korea, No. 1 Arranger Says
- Citigroup sees about 20% offshore debt sale jump in 2016
- Korean names are safe but tight, says Nomura credit analyst
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Citigroup Inc., the biggest arranger of offshore note sales from South Korea, says global investors unnerved by Chinese bond defaults may boost demand during a bulge of refinancing issuance from Seoul in 2016.
International offerings will grow by about 20 percent next year, given maturing debt and sensitive local investor sentiment, according to June Won, managing director of capital markets origination at Citigroup Global Markets Korea Securities Ltd. in Seoul. Sales plunged 25 percent to a five-year low of $26.6 billion in 2015, as the local market offered cheaper borrowing costs. Citigroup sees demand for Korean bonds buoyed by investment-grade yields that are 53 basis points above developed markets.