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KDB raises 27 billion yen from sale of Samurai bonds
Writer : Sender
Jun 28, 2010
Korea Development Bank, the state- run lender known as KDB, raised 27 billion yen ($301 million) from a sale of Samurai bonds as it repays maturing debt.
The lender priced 22.6 billion yen of two-year, 1.48 percent notes to yield 95 basis points more than the yen swap rate and 4.4 billion yen of three-year, 1.56 percent bonds at a 100 basis-point spread, according to data compiled by Bloomberg.
Samurai bonds, or yen-denominated bonds sold by overseas borrowers in Japan, are attractive to Japanese investors because they're yielding "between 30 and 40 basis points more" than domestic corporate notes with the same credit ratings, Yasuhiro Matsumoto, a senior analyst at Shinsei Securities Co., said in a note to clients today.
It's the first Samurai sale from a Korean issuer since January, when Kookmin Bank, South Korea's largest lender, sold 30 billion yen of debt, Bloomberg data show.
Japanese consumer credit company JACCS Co. priced three- year bonds at a 74 basis-point spread on June 22, Bloomberg data show. JACCS is rated A- by Rating and Investment Information Inc., and KDB is two levels higher at A+.
Japanese investors "turned somewhat lukewarm towards South Korean credits after tension intensified," according to a statement today by the Seoul-based lender and the banks managing the sale. "KDB preemptively communicated with its target investors on KDB bond's relative value compared to what is being issued in the Japanese domestic market."
Tensions Rise
South Korea's Cheonan warship was allegedly sunk by North Korea in March, killing 46 sailors. North Korea repeatedly denied it sank the warship, raising cross-border tensions. North Korea declared a sailing ban today in an area off its western coast.
KDB, founded in 1954 to help the nation's industrial development, is selling yen notes to repay maturing debt, a bank official who asked not to be identified said on June 18.
KDB sold 30 billion yen of two-, three- and five-year Samurai bonds in September at spreads of 190, 200 and 210 basis points, Bloomberg data show. A basis point is 0.01 percentage point.
Nomura Securities Co., Nikko Cordial Securities Inc. and UBS AG helped sell the bonds.
(Source: Bloomberg Businessweek)
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