The sale of warrants allows bondholders to convert to peso-denominated debt ahead of risk-weighting increases on foreign-currency debt due to Basel II compliance.
An unusual structure sees Deutsche Bank buy $200 million of the bonds for its own books and sell the rest to the market through a high-premium, fixed-price deal.
Bankers call it a "fiasco" and say Korea's image among foreign investors has been damaged. But why has the $7.4 billion sale been aborted, and what happens next?