Moody’s upgrade a boon to Kexim for 2016

Export-Import Bank of Korea, the nation’s biggest issuer of international bonds, plans to target more developed-market investors after credit upgrades by Moody’s Investors Service.

State-owned Kexim, which provides financing to exporters, plans to raise about $12 billion from offshore note sales this year, compared with $13 billion in 2015, Yoon Hee-sung, treasurer of the Seoul-based bank, said in an interview.

Yoon sees steady demand for Korean state-owned enterprise bonds due to the perceived status of the nation as a “safe haven in Asia” after Moody’s raised the rating for Asia’s fourth-largest economy to Aa2 from Aa3 last month.

“With the Federal Reserve’s interest rate increases and possible volatility rising from Europe, this year’s bond market would be a buyer’s market, rather than a seller’s overall, which means timing will become more critical to sell bonds,” Yoon said. “Having said that, with Moody’s upgrade of Korea, we’re expecting to attract more new conservative investors who invest in higher-grade securities such as sovereign debt.”

Moody’s raised Kexim’s rating to Aa2 from Aa3 last month, following its upgrade of the nation to Aa2, one step above China and two above Japan. It’s the first time the country has received the third-highest grade by the company. Kexim, which accounted for 36.9 percent of total offshore bond sales by Korean issuers in 2015, has been the No. 1 issuer from Korea since 2006, Bloomberg-compiled data show.

“The rating upgrade would bring new investors who only invest in debt rated double A or higher, including central banks, international organizations and pension funds,” Yoon said. Bloomberg