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| "Even now there is no covered bond law. We had to rely on the existing ABS laws and try to structure it to meet those rules" In Hye Weon, Kookmin |
Korea’s Kookmin Bank, along with bookrunners HSBC and Citi, has pulled off a counter-intuitive bond issue that has the region’s bankers buzzing with chatter. And they say there is the likelihood of more to come from the same source. It’s good news in a region desperate for some. The Kookmin bond has tapped into a sector that became deeply unfashionable globally after the sub-prime meltdown in the US – mortgages. But Kookmin and the other banks involved haven’t just managed to get away a pioneering $1 billion covered bond against what appears to be market odds and perceptions – they did so on reasonable terms with a deal that HSBC and Citi managed to get six times oversubscribed.
"The success of this bond shows there’s a good appetite for this type of product out there if structured properly," says Will Ross, HSBC’s Hong Kong-based head of asset-backed securities and structured bonds for Asia-Pacific, who led the Kookmin mandate.
