Woori Bank returned to the senior bond markets for the first time since December of last year on Wednesday (September 28) with a $500 million 144a Reg-S issue via ABN AMRO, BNP Paribas and UBS.
The senior unsecured five-year deal was priced inside of revised price guidance at 99.628% on a coupon of 4.875% to yield 4.96%. This equated to 83bp over Treasuries, or 37bp over mid swaps. Having initially headed to market with a target yield of 40bp over swaps, the leads cut guidance to 38bp after S&P upgraded the bank's credit rating to A- from BBB+ during the book build. Woori is rated one notch lower by Moody's at Baa1.
Fees were 20bp.
The deal was felt to offer fair value relative to the bank's outstanding curve. Its December 2009 bond was trading 6bp tighter than the new deal on a mid swaps basis. Specialists estimate the 2009-2010 curve to be worth about 7bp.
Woori's main strategy was to price the deal as aggressively as possible to Korea's policy banks - KDB, Kexim and IBK. KDB and IBK are currently trading in the low 30bp range over Libor for their 2010 paper.
Woori's order book closed 3.5 times oversubscribed at $1.8 million, with participation by 95 accounts. By geography, 53% went to Asia, 30% headed to the continent and the remaining 17% went to US investors.
By investor type, banks took the majority of the allocations with 65%, fund managers took 21%, and insurance companies and pension funds grabbed 14%.
The deal was launched off the group's global MTN programme and which enabled the deal to target a wider investor base. The deal has trade steadily in its first full day, maintaining a small range around the 83-85bp over Treasuries.
