KB Kookmin Bank issued a 650 million euro sustainable covered bond. The spread was set at 24 basis points, 12 basis points lower than a same-tenor bond issued last year.

KB Kookmin Bank said on Sept. 15 it completed the issuance of a 4-year euro-denominated sustainable dual recourse bond (covered bond) on Sept. 14.

The issue size was 650 million euros. The coupon is 3.625%, adding 0.24 percentage points to the 4-year euro mid-swap (EUR MS) rate. KB Kookmin Bank said it was the largest euro sustainable covered bond issued by a domestic commercial bank.

Institutional investor demand of about 1.5 times the issue size flowed into the deal. The spread was 24 basis points, down 12 basis points from 36 basis points for a same-tenor covered bond issued last year. It is the lowest spread among KB Kookmin Bank’s euro covered bonds.

KB Kookmin Bank has issued related bonds in the European market every year since it first issued a euro covered bond in July 2020. Earlier this month, it held a non-deal roadshow (NDR) for investors in Germany, Luxembourg and Switzerland and met more than 12 investment institutions, including the European Central Bank and international organisations.

The covered bond was issued with collateral of high-quality assets held by KB Kookmin Bank, including mortgage loans. International credit rating agencies S&P and Fitch assigned the bond the top rating of AAA.

The bond was issued in the form of a sustainable bond. The bank plans to use the proceeds for green and social projects under the "KB Kookmin Bank Sustainable Finance Management Framework".

The lead managers were BNP Paribas, Commerzbank, Credit Agricole CIB (CA-CIB), ING, KB Securities and Societe Generale Securities. DZ Bank participated as a co-manager.

A KB Kookmin Bank official said, "We are continuing efforts to expand our investor base in the European market," adding, "We will broaden the investor base for Korean covered bonds."