NongHyup Bank issues $500 mil. in dollar bonds

NongHyup Bank, the banking unit of the newly-launched NongHyup Financial Group Inc., said Tuesday it has successfully floated dollar bonds worth $500 million for the first time since its inception.

The five-year bonds carry an interest rate of 2.3 percent, or 165 basis points above the yield on five-year U.S. Treasurys, the lender said. A basis point is 0.01 percentage point.

NongHyup had originally offered a spread of 180 basis points, but as many as 170 institutional investors subscribed to the debt offer, driving down the spread, it said.

"Amid rising uncertainties in the financial market, the successful bond sale has paved the way to help us secure mid- and long-term bonds and improve our credibility abroad," a bank official said.

The proceeds from the bond sale will be used to repay foreign debts that mature in October, the lender added.

NongHyup Financial Group set sail in March with seven affiliates under its wing after being separated from NongHyup, or the National Agricultural Cooperatives Federation. (Yonhap)