Samurai bonds up for sale as KDB seeks liquidity

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Samurai bonds up for sale as KDB seeks liquidity

Korea Development Bank (KDB) started marketing a sale of as much as 50 billion yen ($635 million) of Samurai bonds planned for next week, according to a person with direct knowledge of the matter.

KDB told investors it plans to price the two-year notes to yield 60 basis points to 75 more than the yen swap rate as soon as next Wednesday, said the person, asking not to be identified.

The lender is following Export-Import Bank of Korea (Kexim) in selling yen-denominated debt as the benchmark government bond yield dropped to 0.79 percent this week. That’s the least since June 2003, and the lowest after 0.502 percent for Switzerland globally.

Kexim sold a record number of Samurai bonds for a Korean borrower last month.

The lender will also offer three-year Samurais yielding 70 basis points to 85 more than the benchmark, and five-year debt at a spread of 80 basis points to 95, the person said.

Bank of America, Citigroup, Nomura Holdings, Daiwa Securities Group and Mizuho Financial Group are helping KDB with the sale, the person said.

KDB last sold Samurai bonds on Oct. 12, when it raised 53.7 billion yen including 3.7 billion yen of two-year 1.45 percent notes priced to yield 105 basis points more than yen swaps.

The yield premium fell to 58.6 basis points yesterday, according to JS Price data on Bloomberg.

The 100 billion yen of notes sold by Kexim on May 17 included 51.4 billion yen of 1.11 percent notes due 2014 priced to yield 70 basis points more than the benchmark, according to data compiled by Bloomberg.

Bloomberg

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