South Korea’s Woori Bank announced on Wednesday that it has successfully issued $500 million in foreign currency denominated contingent convertible bonds (CoCo bonds) under Basel III rules. The bonds are also the nation’s first foreign currency denominated CoCo bonds issued in the forms of consol bonds.
A consol, or perpetual, bond is a fixed income security without maturity date that pays only interest with no obligation to repay the principal. This is the country’s first perpetual hybrid bonds issued offshore since related regulations toughened in July this year.
The bond’s coupon rate is set at 4.5 percent and Woori Bank’s BIS capital adequacy ratio will improve about 0.37 percentage point following the bond issuance.
Global credit rating agency Standard & Poor’s (S&P) upgraded the bank’s credit rating by one notch, citing the improvement in the bank’s capital adequacy after the issuance of the CoCo bonds.
An unnamed official from Woori Bank said that the bank’s new hybrid bond would become a benchmark for local banks that want to issue perpetual bonds.
By Chung Seok-woo
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