KB Kookmin Bank Successfully Issues Euro-Denominated Sustainable Covered Bond

Record-breaking Issuance by Commercial Bank
Successful Launch of Euro-denominated Sustainability Covered Bond

KB Kookmin Bank successfully completed the issuance of a 4-year maturity euro-denominated sustainable dual-recourse covered bond totaling 650 million euros on September 14.

The coupon rate for the issuance is 3.625%, calculated as the 4-year euro mid-swap (EUR MS) rate plus 0.24 percentage points. The total issuance amount of 650 million euros marks the largest issuance in the history of Korean commercial banks.

Despite uncertainties stemming from the European Central Bank (ECB) interest rate hikes and projections for the US benchmark rate, the bond attracted high-quality institutional demand amounting to 1.5 times the issuance size, enabling the bank to achieve the largest issuance ever among domestic commercial banks. The issuance spread stood at 24 basis points—12 basis points lower than the 36 basis points recorded for the same maturity bond issued last year—setting a new record for the lowest spread among KB Kookmin Bank's euro-denominated covered bonds.

Since July 2020, when it became the first Korean commercial bank to issue a covered bond, KB Kookmin Bank has established itself as Korea's leading bank in the euro covered bond market by issuing benchmark bonds every year.

A representative from KB Kookmin Bank stated, "In early September, we visited Germany, Luxembourg, and Switzerland through a European NDR (non-deal roadshow), meeting face-to-face with major investment institutions, including more than 12 European central banks and international organizations, to make every effort to expand our investor base."

KB Kookmin Bank's covered bonds, issued with high-quality assets (mortgage loans) as collateral, have been recognized for their high stability and awarded the highest (AAA) credit rating by international credit rating agencies S&P and Fitch.

This particular covered bond was issued as a sustainability bond. The funds raised will be used for environmental and social projects in accordance with the "KB Kookmin Bank Sustainable Finance Framework." The issuance was jointly led by BNP Paribas, Commerzbank, CA-CIB, ING, KB Securities, and Societe Generale Securities, with DZ Bank participating as a co-lead manager.

This content was produced with the assistance of AI translation services.