South Korean bank to launch US$50m FRCD

Sean Kennedy

KOREA Merchant Banking Corp will launch a US$50 million floating-rate certificate of deposit (FRCD), according to Eric She, senior manager, securities, with Sumitomo Finance (Asia).

The five-year FRCDs are issued at par and carry a coupon of 40 basis points (0.40 percentage points) over six-month LIBOR (London interbank offered rate), he said.

Sumitomo Finance (Asia), DBS, Dresdner (South East Asia), Sudwestdeutsche Landesbank, Standard Chartered Asia and Westdeutsche Landesbank are arranging the deal, which features call and put options after three years, Mr She said.

Co-lead managers get paid 36 basis points for commitments of $5 million or more, senior managers get 33 basis points for $4 million and managers get 30 basis points for $2 million to $3 million.

Allotments would be made on November 21 and the deal would be signed in Hong Kong on December 6, he said.

Korea Merchant Banking Corp is the oldest merchant bank in South Korea, and was set up in 1976 as a joint venture company and listed in February 1994. Its shareholders include Barclays Bank and Bank of Boston with 17.5 per cent each.


Meanwhile, CITIC subsidiary Ka Wah Bank has awarded a mandate to Sanwa International Finance to arrange a $40 million FRCD. The five-year issue carries a three-year put option and will be launched some time within the next week, bankers said.