BofA Securities wins trust from Korean internet-only banks

Seen is a Bank of America branch in New York in May 2009. Reuters-Yonhap

By Park Jae-hyuk

BofA Securities, the investment banking division of Bank of America, has come under the spotlight in the domestic capital market, after it was selected as the underwriter to attract investments for internet-only banks here.

According to industry sources and media reports, Sunday, the U.S. investment bank is in charge of convincing global investors, including private equity firms (PEFs), to invest a combined $100 million in Viva Republica, the Toss mobile money transfer app operator which will open the nation's third digital bank, Toss Bank, during the second half of this year.

Viva Republica is said to have changed the underwriter of the deal recently from JPMorgan, which had advised the fintech firm on its acquisition of LG Uplus' payment gateway business last year.

The fundraising seems to be intended to enhance the services of Viva Republica's wholly-owned subsidiary, Toss Securities, and for the initial public offering (IPO) of the parent firm, which is likely to take place next year at the earliest.

Viva Republica's ties with BofA became known after the latter reportedly enabled K bank, Korea's first internet-only bank, to raise 1.2 trillion won ($1 billion) from its current shareholders and major PEFs, such as MBK Partners and Bain Capital, ahead of its planned IPO in 2023.

As a result, all eyes are on whether the U.S. firm will succeed in attracting investments for Viva Republica and whether it will expand its presence in the local IPO market by continuing to cooperate with the two internet-only banks.

Although BofA displayed a successful track record in the M&A advisory sector last year by pulling off multiple large-scale deals ― the sale of Intel's NAND business to SK hynix, the sale of Takeda Pharmaceutical's Asia-Pacific business to Celltrion and the sale of D'Live's iHQ to KH Electron ― it had remained off the radar of the local IPO market for seven years, until being selected as a co-underwriter for LG Energy Solution's IPO earlier this year.