June 7, 2010

The Export-Import Bank of Korea (EXIM) will soon issue international bonds in Taiwan. This will be the first time a Korean issuer issues bonds in Taiwan. The issuance and offering have been approved by the Central Bank of the R.O.C. (Taiwan) and the Financial Supervisory Commission (FSC). EXIM has scheduled to issue the bonds and list them on GreTai Securities Market (GTSM) on June 23 this year. According to GTSM, EXIM’s decision to issue bonds on our international bond market is indicative of the benefits offered by Taiwan’s capital market. Besides political stability, abundant money supply, and comprehensive regulatory system, our bond market also offers the advantage of highly transparent issuing and trading systems, and is well recognized by foreign issuers. Aside from Korean issuers, several issuers in the U.S. and Europe have also shown interest in issuing bonds in Taiwan and expressed their desire to participate in Taiwan’s capital market.

The EXIM will issue US$270 million of bonds for subscription by domestic investors this time and overbooking is limited to US$500 million. This issue features fixed-rate senior bond, which has a rather simple structure without the package of any structured derivatives. The bond has a tenor of 3.5 years and its coupon interest rate is 2.65%. The minimum purchase unit is US$10,000 and interest will be paid out once every six months. The bond will be redeemed at face value upon maturity. According to EXIM, the bank is the only 100%-state-owned policy-oriented bank in Korea. Its credit rating is the same as the sovereign rating of Korea (Fitch A+). The bank’s main mission is to provide medium and long-term import-export credit in support of government’s economic and trade policies. The bank has raised funds in the U.S. and Singapore before.