Woori Bank prices first sustainability Formosa bonds

The bonds printed by Woori Bank form part of an ongoing series of green, social and sustainability bonds, and the funds raised will finance sustainable development projects

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South Korean lender Woori Bank on May 7 priced a US$450 million floating rate notes (FRNs), representing its inaugural foreign currency-denominated sustainability bonds and also the first sustainability Formosa bond offering out of Korea. This is also the largest Formosa bond issuance out of Korea so far.

The Reg S five-year bonds are priced at par with a similar coupon and re-offer spread of 77bp over the three-month US dollar Libor, or in line with the final price guidance.

In executing the transaction, Woori held a non-deal roadshow three weeks prior to the pricing. The majority of investors that Woori had met at the roadshow responded with their indication of interest when the deal arrangers opened the order book in early Asia trading on May 7, and eventually committed with actual orders.

The final order book amounted to over US$1.1 billion from 54 accounts, with 84% of the paper allocated to Taiwanese investors, 15% to the rest of Asia and 1% to other markets. By type of investors, banks accounted for 62%; asset managers, fund managers and securities companies took 35%; and private banks and other investors 3%.

Net proceeds from the transaction will be used towards financing eligible categories of projects in accordance with Woori Bank’s green, social and sustainability (GSS) bond framework.

Citibank Taiwan, Credit Agricole CIB, Taipei, and SG Securities (HK), Taipei acted as the joint bookrunners for the transaction.

Woori last tapped the Formosa bond market in January 2018 when it raised US$300 million in FRNs for five years.

Under Woori’s GSS bond framework, the bank intends to issue a series of GSS bonds to fulfill its economic, environmental and social responsibilities. The GSS bond framework has been developed to facilitate transparency, disclosure, integrity and quality in Woori’s GSS bonds for interested investors and stakeholders.

Financing may include instruments such as investments and loans that contribute to sustainable development by earmarking the proceeds for projects and expenditures that fall within the eligible categories. Woori, under the framework, may issue GSS bonds in any currency, jurisdiction and market reflecting its current and future business requirements.

Woori has engaged Sustainalytics to provide an independent third party to provide assurance on the bank’s GSS bond framework and its alignment to Green Bond Principles 2018, Social Bond Principles 2018 and the Sustainability Bond Guidelines 2018.

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Date

10 May 2019

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