Global co-ordinator Credit Suisse First Boston and joint bookrunners Barclays, HSBC and JPMorgan priced an Eu500 million five year issue for the Korea Development Bank (KDB) yesterday (Thursday).
Pricing came inside guidance and the deal was completed at an issue price of 99.791% on a coupon of 4.375% to yield 4.4225% or 52bp over euribor. It had been marketed on a 65bp to 75bp range, itself a much tighter level than the 90bp to 95bp indicative range of late July when the bank last tried to bring the deal to market.
On a like for like basis, the euro deal priced only a couple of basis points wide of the dollar deal, which had tightened to about 60bp over Libor during its first day's trading. On an equivalent basis, the euro deal has come at about 62bp over.
The dollar, priced Wednesday comprised a $750 million transaction with an issue price of 99.617% and coupon of 5.75% to yield 5.801%. This equated to a launch spread of 119bp over Treasuries or 70bp over Libor. Within the first day of trading it tightened 5bp to 10bp according to different quotes from banks.
Taking full advantage of the momentum generated by the dollar deal to launch the more difficult euro transaction was a smart move on the part of the borrower and lead managers. Few Asian borrowers are able to match euro pricing with their equivalent dollar levels and KDB is likely to be very pleased at the strides it has made since its euro debut in 2000.
In the new deal, a total of 117 accounts were reported, of which 45 were new to the credit in euros. Books are said to have closed three times oversubscribed after being opened Asia's morning and closed during London's afternoon. By geography, 22% was placed back in Asia and the rest in Europe.
"There was not much talk of a North Korea risk premium," one banker reports. "Investors seem to be very quick to change their viewpoint if they feel a deal is going well."
Fees mark something of a new low for a public Korean bond issue and total 17.5bp
