Kexim Offers U.S. Bonds in Korea’s First Foreign Sale This Year

Export-Import Bank of Korea, the nation’s biggest issuer of international bonds, is offering U.S. dollar-denominated notes in the year’s first global sale by a South Korean issuer.

State-owned Kexim, which provides credit to exporters, is marketing five-year securities at a yield premium of about 105 basis points more than Treasuries, as well as 10-year notes at about 120 basis points, a person familiar with the matter said. The average spread for Korean-issued dollar bonds climbed 2.9 basis points last week, compared with a 23 basis point-rise for Chinese notes, according to JPMorgan Chase & Co. indexes.

Volatile market swings fueled by oil’s price plunge, Greece and Chinese developer concerns are driving demand for safe-haven assets that offer additional returns over U.S. Treasury yields, according to Mark Reade, a Hong Kong-based analyst at Mizuho Securities Asia Ltd. “In that regard, issuers such as Kexim should ultimately benefit,” he said.

Kexim plans to raise about $13 billion from offshore sales in 2015, compared with last year’s $12 billion target, to fund rising maturities and lending activity, its director general of international financing Yoon Hee Sung said last month.

Other banks in Asia’s fourth-largest economy are lining up to sell offshore bonds as early as this month, a person familiar with the matter said. Woori Bank hired six banks for investor meetings in October and Kookmin Bank appointed seven in December.

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