Kiwoom Securities said on the 19th that it completed the issuance as the lead manager of a public kimchi bond issued by Hyundai Card. A kimchi bond is a bond issued in foreign currency in the domestic market.
This issuance is the first public kimchi bond case carried out in Korea since the Bank of Korea eased investment restrictions in Jun. last year. In the past, public offerings were limited due to regulations, but they are drawing renewed attention amid rising exchange-rate volatility and growing demand for foreign-currency funding.
The public kimchi bond is a $20 million, 1-year U.S. dollar-denominated floating-rate note (FRN). The rate was set at the Secured Overnight Financing Rate (SOFR) plus a 60-basis-point spread.
Kiwoom Securities said the issuance allows the issuer to move beyond a won bond-centered funding structure and diversify currency funding. It added that by linking foreign-currency funding with cross-currency swaps (CRS), it improved capital management efficiency and laid the groundwork to flexibly manage financing costs in line with market conditions.