South Korean borrowers and The Export-import Bank of Korea flock for loans due to the continuous rising interest rates. The impact of the rising interest rates might worsen bond market sentiment. Meanwhile, The Export-import Bank of Korea also closed its A$880m, the largest syndicated facilities. Although pricing competition is soaring, both the rarity value and investment-grade status of South Korean credits won over offshore lenders. Kexim’s rating has achieved Aa2/AA/AA-. The firm has leveraged its debut Australian dollar loan from the A$500m base size. The total of nine lenders join this general syndication.
Taiwanese banks are also committing 57% of the borrowing. The firm has realized that the Aussie dollar does not include a natural funding currency for them. So, it means that they need to consider the additional swap costs. Taiwanese bank loan banker said that the Double A rating practically is tough to achieve. Plus, tenors on the Kexim deal are shorter compared to the South Korean financial institution. He added that banks are different from each other from the funding costs. So, this kind of funding is relatable after having all the calculations.
Referring to the interest margins of 62bp and 77bp over BBSY, the loan offering was the top-level-all-in pricings of 73bp and 88bp. These are following the two and three-year tranches. Actually, this is the first Australian dollar loan coming from a South Korean issuer. Previously, in 2018, Reclean Daefu’s also had five-year project financing for A$103m. This is to give backing to the firm’s constructions of fuel plants in Korea. The arranger of the transaction is Industrial Bank of Korea. The participant was only Darby Hana Jawon Soon Hwan.
