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Busan Bank issues $250 million CoCo bonds to bolster capital

Collected: 2016.07.20

Distributed: 2016.07.21

Source: Go Direct

South Korea’s Busan Bank Co. said on Tuesday that it has issued $250 million worth foreign currency denominated contingent convertible bonds (CoCo bonds) amid lingering uncertainties in the financial market after Britain’s decision to leave the European Union last month.

According to the regional bank, the issued CoCo bonds have a maturity of 10 years and an interest rate of 3.675 percent - 2.1 percent higher than the United States’ 10-year treasury notes. It is the lowest interest rate among other dollar-denominated subordinated bonds issued in Asia after applying Basel III rules.

Busan Bank said that it has been able to confirm $2.4 billion worth purchase demand from about 160 investors in Asia and Europe, which is almost 10 times more than the actual issued amount. Jung Chung-kyo, vice president of Busan Bank, said that the bank was able to successfully issue CoCo bonds thanks to its stable business figures that have been acknowledged as steady growth potential. HSBC Holdings Plc and Standard Chartered Plc participated as co-advisors in issuing CoCo bonds for Busan Bank.

By Park Dong-min

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