Foreign Loan Situation ImprovingDomestic business groups' ability to secure foreign based loans are rapidly getting better since the International Monetary Fund(IMF) bailout program beset Korea last year.
Korea Electric Power(KEP) on November 8 decided to issue 100 million dollars of non-guaranteed 1 year foreign bonds with a 4.25-4.5% interest rate plus LIBO interest rates. This is the best conditioned foreign bond issued by a Korean company since the economic crisis began.
According to Credit Swiss First Bank(CSFB), the main contributor of the loans, said, 'We raised those external volunteers last week and the application money was far more than we initially imagined, so the interest rate did not have to be high.'
Although credit evaluation institutes such as Standard and Poors determined KEP's credit rating at BB+, which means not proper for investment, foreign investors seem to have more faith in Korea's future.
Park Sung Jin, a Shinyoung Securities' bond dealer commented, 'Recently there are lots of cases of issuing foreign bonds with no assurance.'
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