Woori issues W300 bil. subordinated bonds

By Kim Bo-eun

Woori Financial Group's building in central Seoul / Korea Times file

Woori Financial Group said Thursday it has successfully issued 300 billion won ($253.6 million) worth of subordinated bonds.

A subordinated bond is one whose claim on repayment comes after all other creditors have been repaid.

This is the first subordinated bond in won to be issued by a local financial holding company since Basel III regulations were introduced.

The bonds carry a coupon rate of 2.28 percent, the lowest among contingent convertible bonds issued by domestic financial holding companies.

"We were able to issue the subordinated bonds at the lowest rate and this shows heightened trust of the market in Woori Financial's performance and its plan to expand its non-banking division,” a company official said.

Woori Financial expects the group's BIS capital adequacy ratio will rise by 14 basis points ― the ratio had stood at 11.06 percent, the lowest among the five financial groups here.

The BIS ratio, a key barometer of financial soundness, refers to the ratio of a bank's capital to its risky assets.

Woori's BIS ratio fell after it became a financial group in January 2019. Woori Bank's BIS ratio stood at 15.65 percent as of the end of 2018.

The latest move is seen as part of its preparation for M&As of non-banking financial firms.

Woori is in the process of acquiring shares of ABL Global Asset Management, Tongyang Asset Management and Kukje Asset Trust, a privately held real estate management company.

The group is also seeking to make Woori Card and Woori Investment Bank affiliate companies. Currently, they are affiliates of Woori Bank.