ID :
54615
Thu, 04/09/2009 - 15:43
Auther :
Shortlink :
https://www.oananews.org//node/54615
The shortlink copeid
S. Korea sells US$3 bln in state bonds amid liquidity crunch
SEOUL, April 9 (Yonhap) -- South Korea sold US$3 billion worth of
dollar-denominated state bonds Thursday, the Ministry of Strategy and Finance said, quelling concerns over a liquidity crunch in the world's 13th biggest economy.
The announcement comes at a time of rising stock prices, a surging Korean won,
and a rising trade surplus as imports decline.
South Korea recorded a record monthly trade surplus of $4.6 billion in March as
imports dropped sharply, the second monthly surplus in a row, with the Bank of
Korea predicting an annual trade surplus of $5 billion this year despite the
projected 2 percent contraction in growth due to the global recession.
"We've successfully issued $3 billion in U.S. dollar-denominated foreign currency
stabilization bonds as of 1 a.m. today amid keen interest by investors from the
United States, Europe and Asia," a ministry spokesman said.
The spread on the five-year bonds, worth $1.5 billion, was set at the U.S.
treasury rate plus 400 base points with the spread on $1.5 billion of 10-year
bonds being at the U.S. treasury rate plus 437.5 base points.
The South Korean government had planned to sell $2 billion, but raised the amount
due to higher interest in the sale as expected, the spokesman said, noting the
order book surpassed $8 billion.
The government Tuesday named six financial institutions as lead managers. They
are Samsung Securities, Deutsche Bank AG, Goldman Sachs Group Inc., Merrill Lynch
& Co., Citigroup Inc. and Credit Suisse Group AG.
Seoul will consider selling up to $3 billion in additional state bonds abroad by
the end of the year, according to another official.
"We hope the debt sale will not only terminate negative perspectives of the South
Korean economy, including groundless rumors of economic crisis but also quell
possible uneasiness from North Korea's rocket launch," the official said.
South Korea last sold state debt in November 2006 when the ministry issued $1
billion in foreign currency stabilization bonds.
The ministry withdrew its plans to sell $1 billion of state debt in the last
minute in September during a liquidity crisis in the international financial
market in the wake of the subprime mortgage crisis that hit the Wall Street to
cause the worst recession in decades.
"The debt sale on low rates has reassured us that there are great demands for
Korean bonds," the official said. "It will be a green light for banks and
state-run companies seeking foreign capital. They now have benchmarks in terms of
rates."
Several South Korean financial institutions are expected to issue more than $2
billion worth of bonds by the end of May.
Hana Bank, South Korea's No. 4 lender, recently raised US$1 billion by selling
government-guaranteed bonds, becoming the first local lender to tap into a state
debt guarantee program.
hdh@yna.co.kr
(END)
dollar-denominated state bonds Thursday, the Ministry of Strategy and Finance said, quelling concerns over a liquidity crunch in the world's 13th biggest economy.
The announcement comes at a time of rising stock prices, a surging Korean won,
and a rising trade surplus as imports decline.
South Korea recorded a record monthly trade surplus of $4.6 billion in March as
imports dropped sharply, the second monthly surplus in a row, with the Bank of
Korea predicting an annual trade surplus of $5 billion this year despite the
projected 2 percent contraction in growth due to the global recession.
"We've successfully issued $3 billion in U.S. dollar-denominated foreign currency
stabilization bonds as of 1 a.m. today amid keen interest by investors from the
United States, Europe and Asia," a ministry spokesman said.
The spread on the five-year bonds, worth $1.5 billion, was set at the U.S.
treasury rate plus 400 base points with the spread on $1.5 billion of 10-year
bonds being at the U.S. treasury rate plus 437.5 base points.
The South Korean government had planned to sell $2 billion, but raised the amount
due to higher interest in the sale as expected, the spokesman said, noting the
order book surpassed $8 billion.
The government Tuesday named six financial institutions as lead managers. They
are Samsung Securities, Deutsche Bank AG, Goldman Sachs Group Inc., Merrill Lynch
& Co., Citigroup Inc. and Credit Suisse Group AG.
Seoul will consider selling up to $3 billion in additional state bonds abroad by
the end of the year, according to another official.
"We hope the debt sale will not only terminate negative perspectives of the South
Korean economy, including groundless rumors of economic crisis but also quell
possible uneasiness from North Korea's rocket launch," the official said.
South Korea last sold state debt in November 2006 when the ministry issued $1
billion in foreign currency stabilization bonds.
The ministry withdrew its plans to sell $1 billion of state debt in the last
minute in September during a liquidity crisis in the international financial
market in the wake of the subprime mortgage crisis that hit the Wall Street to
cause the worst recession in decades.
"The debt sale on low rates has reassured us that there are great demands for
Korean bonds," the official said. "It will be a green light for banks and
state-run companies seeking foreign capital. They now have benchmarks in terms of
rates."
Several South Korean financial institutions are expected to issue more than $2
billion worth of bonds by the end of May.
Hana Bank, South Korea's No. 4 lender, recently raised US$1 billion by selling
government-guaranteed bonds, becoming the first local lender to tap into a state
debt guarantee program.
hdh@yna.co.kr
(END)
