korea eximbank(kexim) - globalcapital...korea eximbank (kexim) is an official export credit agency....
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Korea
194 EuroWeek Financing supranationals and agencies
Korea Eximbank(Kexim)Rating A1, A, A+
Yong-hwan KimChairman & president
Dong-soo ParkDeputy president
Jin-kyung KimExecutive director
KeY officials
Korea Eximbank (Kexim) is an official export credit agency. Established in 1976, Korea Eximbank’s primary services include export loans, trade finance and guarantee programmes, and the bank also provides overseas investment credit, natural resources development credit, import credit and information services.
Korea Eximbank is also responsible for the operation of two government funds: the Economic Development Co-operation Fund (EDCF) and the Inter-Korean Co-operation Fund (IKCF).
overview
Source: Kexim
$ bn
0 5
10 15 20 25 30 35 40 45
31 D
ec 05
31 D
ec 06
31 D
ec 07
31 D
ec 08
31 D
ec 09
31 D
ec 10
ToTal asseTs
Source: Kexim
$ bn
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
31 D
ec 05
31 D
ec 06
31 D
ec 07
31 D
ec 08
31 D
ec 09
31 D
ec 10
ToTal caPiTal
Source: Kexim
$ bn
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
10.0
2005
2006
2007
2008
2009
2010
Feb 1
1
funDing requiremenT
Source: Kexim
Korean government
74.4%
Bank of Korea 22.1%
Korea Finance Corporation
3%
ownershiP sTrucTure
Data at February 1, 2011. Source: Kexim
$ bn
0 0.5
1 1.5
2 2.5
3 3.5
4 4.5
5
2011
2012
2013
201420
1520
1620
1720
1820
1920
2020
2120
22
issuance maTuriTY Profile
*To February 1. Source: Kexim
$ bn
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00
2005
2006
2007
2008
2009
2010
2011
*
gross BonD issuance
rank lead manager amount $m no of issues
% share
1 JPMorgan 996 5 18.88
2 Deutsche Bank 537 3 10.19
3 RBS 529 6 10.04
4 HSBC 517 8 9.81
5Daiwa Capital Markets
484 1 9.19
6Bank of America Merrill Lynch
469 3 8.88
7 Morgan Stanley 296 4 5.62
8Standard Chartered Bank
290 4 5.51
9 RHB Capital Bhd 261 2 4.95
10 Citi 248 1 4.7
10 BNP Paribas 248 1 4.7
subtotal 4,877 31 92.47
Total 5,275 33 100
Source: Dealogic (March 16, 2010 to March 15, 2011)
ToP BooKrunners
Korea
Financing supranationals and agencies EuroWeek 195 %100
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minimum size: usually $20m
structure: mostly plain vanilla (exceptions include extendible notes, FX-linked notes)
currency: No preference or limitation (most non-USD issues are swapped into USD)
PrivaTe PlacemenT PolicY
mid and long term US shelf, yen shelf, euro MTN, Malaysian MTN, Australian MTN
short termUS CP, euro CP
issuance meThoDs
Pricing date March 3, 2011
value Sfr250m
maturity date March 30, 2015
coupon 2.375%
spread to swaps 100bp
Bookrunners RBS, UBS
Pricing date October 13, 2010
value $1bn
maturity date January 29, 2021
coupon 4%
spread to benchmark 160bp over USTs
Bookrunners Bank of America Merrill Lynch, Barclays Capital, HSBC, JPMorgan, Morgan Stanley
Pricing date September 3, 2010
value $500m
maturity date March 13, 2012
coupon 3m Libor +105bp
Bookrunners JPMorgan
Source: Dealogic
recenT Deals
standard & Poor’s
A, stable outlook
strengths•Criticalpublicpolicyroleascountry’slegally
mandated export credit agency•Integrallinkwiththegovernment
weaknesses•Lowprofitability•Highconcentrationrisk
Kexim’s stable outlook reflects that on the long-term rating on the Korean government. S&P expects the bank’s public policy role to stay intact over the medium term, as the government remains engaged in economic management. So far, the government has shown no intention of privatising the bank. Nevertheless, in the unlikely scenario that Kexim’s public policy role, or link, to the government diminishes if the government embraces a broader laissez-faire stance, the ratings on Kexim may come under downward pressure, depending on the magnitude of such a change.
KeY recenT raTing agencY commenTarY
fitch
A+, outlook stable
The ratings of Export‐Import Bank of Korea (Kexim) are aligned with the Republic of Korea’s sovereign rating, reflecting its quasi-sovereign status. The Korean government is legally obliged to cover Kexim’s losses if its capital reserve cannot cover them, thereby effectively guaranteeing its solvency. Fitch notes that there is still a risk of higher albeit not excessive credit costs, given slow global economic growth and the bank’s significant bias towards corporates, particularly in the shipbuilding sector (47% of total; 5% for SME shipbuilders). Fitch notes that Kexim’s liquidity is highly vulnerable to capital market conditions (particularly for foreign currency), due to its full reliance on wholesale funding. However, the bank’s weak funding structure is mitigated by the government’s strong support. Also, despite substantial expansion in loans and guarantees in recent years, Kexim’s capitalisation was adequate at mid-2010, with a Tier 1 of 9.3% and a total capital adequacy ratio of 10.9%, thanks to the government’s capital injections.
KeY recenT raTing agencY commenTarY