THE fall-out from the Daiwa Bank debacle and a resultant pall over Japanese bank funding have forced Korea Exchange Bank (KEB) to abandon a planned US$150 million three-year fund-raising in favour of a Hong Kong dollar deal.
Bankers said Chemical Securities Asia would be arranging a HK$1.2 billion floating-rate note (FRN) and added that KEB would be seeking access to the liquidity adjustment facility (LAF) operated by the Hong Kong Monetary Authority.
KEB is one of several South Korean banks seeking to raise US dollars before the end of next month, but the Japanese bank funding crisis that followed Daiwa's revelation of US$1.1 billion in trading losses has hit their source of funds.
According to basis point , the Asian debt market newsletter, the market is becoming crowded with Korean banks seeking cash.
It said Commercial Bank of Korea, Korea Long Term Credit Bank, Seoul Bank, Asian Banking Corp, Cho Hung Bank, Hana Bank, Korean Development Bank, Korea First Bank, Korea International Merchant Bank and Shinhan Bank were all trying to raise money.
Because of the so-called 'Japanese premium', Japanese banks were paying more for funds and were passing the higher costs on to South Korean borrowers such as banks, several bankers said.
