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S. Korea’s Shinhan Bank issues 10-year $500 mn in FCCBs at 3.875% coupon

Collected: 2016.03.19

Distributed: 2016.03.22

Source: Go Direct

South Korea’s Shinhan Bank said on Friday that it raised $500 million by issuing 10-year foreign currency convertible bonds (FCCBs) with a coupon - annual interest rate - of 3.875 percent, or 2.05 percent over the 10-year U.S. Treasury notes. It is the cheapest foreign debt rate among local banks. The price and the yield on the bond type moves on the opposite direction. The higher the yield, the lower is the price.

Shinhan Bank said the latest subordinated debt issue has strengthened liquidity in its foreign currency reserve and capital adequacy ratio ahead of stronger global capital requirements.

The issue price comparatively lower than similar debt issued by Japanese and Singapore banks would also help boost creditability of Korean banks generally on the global debt market, it said.

The $500 million issue drew $3 billion subions from 228 institutions - 60 percent from Asian investors, 24 percent American investors, and 16 percent from others.

By Park Yoon-ye

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