IBK to refinance US$300 mln in bonds ahead of schedule

SEOUL, Feb. 21 (Yonhap) -- The state-owned Industrial Bank of Korea (IBK) will redeem US$300 million worth of bonds in May before they mature to bolster investor confidence, sources said Saturday.

The bank, which specializes in lending to smaller businesses, plans to exercise a
call option to pay back the subordinated bonds that come due in 2014, according
to the sources.
"Thanks to IBK's ample foreign currency reserves, the early repayment won't
affect IBK's capital base or foreign currency liquidity," said a bank official.
The state-run bank's move comes after a recent decision by Woori Bank not to
prematurely redeem its subordinated bonds, which are typically paid back before
maturity per market practice. The nation's No. 3 lender said earlier this month
it will opt not to refinance $400 million worth of bonds due to rising funding
difficulties, roiling investors at home and abroad.
IBK has received 1 trillion won (US$664 million) in capital and equities from the
government in the last two months to help it increase lending to cash-strapped
local firms. The lender's overall capital adequacy ratio stood at 11.39 percent
as of the end of 2008.
pbr@yna.co.kr
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