Thursday, 15 January 2009

Bond Alert: Korea Development Bank Offers Benchmark Size Issue (Update)

This came out a few minutes ago while I was cooking pasta:

Issuer: The Korea Development Bank (KDB)
Expected Ratings: Aa3 / A / A+ (Negative/Negative/Negative)
Format: Senior Fixed Rate SEC Reg'd Global Notes
Maturity: Five Years
Size: Benchmark Issue in U.S. Dollars (At Least $500 Million)
Price Guidance: N.A.
Managers: BNP Paribas SA / Deutsche Bank AG / HSBC Holdings Plc. / Merrill Lynch & Co. / Royal Bank of Scotland Plc.

Check the terms for COC (change of control) for this issue -- in the event of any decrease in the Korean government´s stake and a deterioration in ratings, there will be a 100 percent put. The old times are gone -- tougher conditions are on the table even for borrowers with good credit quality.

But the truth is, a source told us, that there are concerns regarding the possible sale of KDB. The source tell us that the problem is that the proceeds from any sale aren't used to prop up capital but funneled toward other purposes. South Korea had announce plans to sell the bank last year but the credit crisis and a political standoff have both put it at a standstill.

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