Kexim, the state-owned borrower, plans to wrap this year with bond sales. Analysts said the bond sales was actually a strategic decision for the company. They have identified market volatility that choose to front load issuance in the first half. The firm has a 2022 funding target for as much as $13bn. It has almost been achieved. So, there would be a little bit of a challenge to take small transactions in the next months. Although it is challenging, the company relies on its demand plus the fundraising has been covered as well. The front load issuance comprises 75% of its June target with $3bn trade in January.
Kexim’s rate is Aa2/AA/AA- issuer. Although it has a high rate, it does not simply show that Kexim encountered an easy way battling with the market condition. The company needs to take market opportunity very carefully as well as paying the new issue premiums. Because this is the biggest change for issuers following 2021 to 2022 shifts. The team head of treasury group at Kexim, Jae-hoon Oh believes that the market condition challenges both investor and issuer to enter. He added that the degree is too extreme, worse, it could get serious. So, the company wishes that they could keep performing well when the situation is bad.
Although Kexim seems to find it hard to face the market condition, they actually adapt so well in the shifting market. Recently, the company has sold a $1bn or two-year fixed-rate bond as a part of a $2.5bn triple tranche. The trade happened in early September. Moreover, the short tenor was actually peculiar for the bank. However, it mirrored investor feedback showing short tenor preferences. Jae-hoon Oh added that nearly every investor chooses shorter tenors. The shorter the better, this is what they have said. Thus the company issue longer-dated bonds using private bonds because it is not actually a big deal for profile maturity.
