S Korean bank raises 1.75b yuan via dimsum bond

SEOUL - The Export-Import Bank of Korea ( Eximbank), South Korea's state-run trade bank, said Thursday that it has raised 1.75 billion Chinese yuan ($280 million) through dimsum bond sales in Hong Kong.

The fixed-rate yuan-denominated bonds with a maturity of three years were priced to yield 3.25 percent, according to an e-mailed statement. The yield was changed into 139 basis points (bps) more than the three-month Libor after swapping yuan into the US dollar.

Dimsum bond refers to a bond denominated in the Chinese yuan and issued in Hong Kong by foreign entities. The bonds are attractive to foreign investors who want exposure to yuan-denominated assets.

The issuance was the largest ever issued by any South Korean player, the bank said. The yield was over 10 bps lower than the one priced in the dollar funding market.

An official at the bank said that market needs for appropriate investment amid remaining concerns over Europe's debt crisis were recognized at a timely manner, noting that idle money in Hong Kong increased following cuts in interest rates and reserve requirement ratio by the People Bank of China, the country's central bank.