The bank explained that it would use the fund to provide loans to Korean companies trading with Chinese firms. (image: Kobizmedia/Korea Bizwire)
SEOUL, Oct. 13 (Korea Bizwire) – Woori Bank has issued yuan-denominated bonds for the first time among Korean commercial banks. The bank said on October 10 that it issued two-year bonds in the yuan currency worth 200 million yuan (US$32.7 million).
Of the “Kimchi bonds,” or non-won-denominated bonds issued in the Korean market, this is the first occasion for yuan-denominated bonds.
The bank explained that it would use the fund to provide loans to Korean companies trading with Chinese firms. The contracted rate of interest for the bonds is 3.87 percent a year. Underwritten by HSBC Securities, the deal was taken on by the Bank of Communication and the Korea Securities Depository who will take the job of payment settlement. The bonds will be sold to domestic institutional investors in the form of private subscription.
In July this year, Korean President Park Geun-hye and her Chinese counterpart Xi Jinping agreed to allocate an RQFII (RMB qualified foreign institutional investor) quota of up to 80 billion yuan ($13.1 billion).
Accordingly, the world’s seventh largest currency market buying and selling the won and yuan currency directly has been established and Korean banks were able to issue bonds denominated in the Chinese yuan.
By Sean Chung (schung10@koreabizwire.com)
