KB Kookmin Bank Successfully Issues Euro-Denominated Sustainable Covered Bonds

[Financial News] KB Kookmin Bank announced on the 15th that it successfully completed the issuance of 650 million euros worth of 4-year euro-denominated sustainable covered bonds on the 14th.
The issuance rate is 3.625%, calculated by adding 0.24%p to the 4-year Euro Mid-Swap (EUR MS) rate. The issuance amount is 650 million euros, marking the largest issuance volume in the history of commercial banks.
This issuance strategy produced particularly effective results in a challenging market. Despite global market uncertainty—characterized by increased market fatigue from preemptive issuances since August, European Central Bank (ECB) interest rate hikes, and heightened expectations for the US benchmark interest rate due to concerns over recent inflation stemming from the prolonged war in Iran—the bank demonstrated its solid position by successfully issuing the largest bond in the history of commercial banks, attracting demand from blue-chip institutions amounting to 1.5 times the issuance amount. The issuance spread also achieved a performance of 24 basis points, 12 basis points lower than the 36 basis points recorded for bonds of the same maturity last year. This set a new record for the lowest spread among euro-denominated covered bonds issued by KB Kookmin Bank.
This covered bond was issued in the form of a sustainability bond, and the funds raised will be used for eco-friendly and social projects corresponding to the 'KB Kookmin Bank Sustainable Finance Management Framework.' The issuance was led by BNP Paribas, Commerzbank AG, Crédit Agricole CIB, ING Group, KB Securities, and Société Générale Securities, with DZ Bank participating as a co-lead manager.
Meanwhile, KB Kookmin Bank has been issuing benchmark bonds in the Euro covered bond market every year since becoming the first commercial bank to issue covered bonds in July 2020.

[email protected] Ye Byeong-jeong Reporter