The six banks mandated for a $150 million one-year loan for KorAm Bank launched the transaction yesterday (Tuesday). Citibank/SSB, Commerzbank, Sumitomo Mitsui Banking Corporation and Standard Chartered are the book-runners for the deal, while DBS and Natexis Banque Populaires make up the rest of the mandated group. The deal was launched into general syndication, which is expected to close on September 16.
The deal pays a spread of 15bp over Libor, half of the 30bp margin that KorAm paid on a similar sized deal of like maturity when it tapped the markets last September. The proceeds from the current transaction will go toward repayment of last year's loan that matures by the end of the month. According to figures provided by Dealogic, KorAm also tapped a $150 million one-year loan in March last year paying a margin of 45bp over Libor. In May this year KorAm raised HK$800 million through a one-year deal at a spread of 18bp over Hibor.
The current deal is being marketed on three levels. Banks joining the transaction as co-arrangers with commitments of $10 million or above receive 8bp in participation fees (all-in of 23bp), while lead managers will get 7bp (all-in of 22bp) for commitments of $5 million-$9 million. Senior managers committing $2 million-$4 million receive participation fees of 6bp (all-in of 21bp).
The borrower is likely to upsize the deal should it meet with good demand. The deal is the first debt financing for Koram Bank since its recent rating upgrades. Moody's upgraded the bank's ratings to Baa3 in June, while Fitch raised its ratings to BBB+. KorAm reported a 105% increase in net income to KRW47.3 billion for the first quarter ended March 2002.
