One banker described Hanvit Bank as an "ambassador for Korea" after the successful raising of $850 million through a subordinated debt deal in February. As it turns out, Hanvit may be the ambassador for the entire region as international investors show new interest in the potential of the Asian markets.
The characteristics of the Hanvit deal demonstrate the risk international investors are willing to take in the Asian markets. Hanvit seriously suffered in the wake of Daewoo's default, and it was among many Korean companies needing to rebuild capital. The solution for Hanvit came with the decision to issue a subordinated bond of upper and lower tier two debt, an innovative move for the emerging markets sector. The Ba2/BB- rated bank was willing to test the confidence of international investors.
JP Morgan, which had previously worked with Hanvit Bank and had experience in emerging markets, was lead manager for the issuance. Jonathan Brown, global head of emerging markets syndicate in London, concludes that the Korean market is at last emerging from the Asian crisis. From the time Hanvit approached JP Morgan to discuss how to raise capital, it took only three and a half weeks until completion of the deal.