IBK issues $700m global bond

The state-run Industrial Bank of Korea issued a global bond worth $700 million with a maturity of five years, officials said Friday.

The bond has a fixed-interest rate of 2 percent, the lowest among foreign currency bonds issued by South Korean banks this year.

The rate is 15 basis points lower than the initial offering price and was determined by adding 75 basis points to the five-year U.S. government bond interest rate.

“We increased the amount outstanding from $500 million to $700 million, spurred by Moody’s recent decision to raise Korea’s credit rating,” said an IBK official.

The global credit appraiser said last week it would revise Korea’s rating from stable to positive, citing improved management of public corporation’s debts, reduced vulnerability to global market turbulence and the ongoing track record of fiscal prudence.

“The funds of the global bond will be used to support small and medium-sized export companies.”

The bank held a global investment briefing in March to promote its role as a state policy financer to potential bond purchasers.

By Bae Hyun-jung (tellme@heraldcorp.com)