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| Korea Investment & Securities headquarters on Yeouido, Seoul / Courtesy of Korea Investment & Securities |
By Anna J. Park
Korea Investment & Securities is set to issue around $600 million worth of foreign currency bonds around July this year. It will be the first time that the brokerage is issuing dollar-denominated debt since it opened in 1974.
According to investment banking industry sources, Friday, Korea Investment is currently in talks with Citigroup Global Markets, Credit Suisse and HSBC, which have been chosen as underwriters for the bond issuance.
The bonds being issued will mature in three to five years. Targeting institutional investors from Asia, Europe and the Middle East, the firm is said to be considering the issuance of bonds themed on environmental, corporate and social governance (ESG) principles.
The brokerage has long maintained a leading position in the industry in terms of profits and performance. In particular, it took the top position during the first quarter of this year in terms of quarterly net profit among local brokerages, earning more than 350.6 billion won ($314 million) during the first three months of this year.
Market watchers say more and more companies are planning to raise direct foreign currency capital by issuing dollar-denominated bonds because they do not need to take additional procedural hedging strategies like swaps regarding foreign capital. This will provide a great deal of convenience in managing foreign-currency capital for a major securities firm like Korea Investment, which handles a wide spectrum of overseas investments. Market watchers expect more Korean brokerage firms will now target overseas bond markets to attract dollars.
No Korean brokerages other than Mirae Asset Securities have issued foreign currency notes so far. Back in November 2018, Mirae Asset Securities paved the way for local brokerage companies to raise foreign capital by issuing dollar-denominated bonds. Mirae Asset succeeded in issuing $300 million worth of foreign-currency bonds, generating huge interest from institutional investors in Asia and Europe.
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