The establishment of Global Covered Bond Programme and issuance of US$500,000,000 Covered Bonds due 2020 by KB Kookmin Bank was the first program issuance of the legislative covered bonds in Korea since the enactment of the Act on Issuance of Covered Bonds in 2013. Covered bonds are a cost effective means of raising a large amount of capital for many issuers, particularly because covered bonds have positive aspects of both secured bonds and asset backed securities.  

Shin & Kim advised BNP Paribas as the sole arranger.  We assisted BNP during the different phases of the issuance, from the structuring of the transaction within the framework of the Covered Bond Act to the review of the programme documents and the prospectus.

This transaction was particularly noteworthy because: (i) it was the first issuance of the legislative covered bonds in the entire Asia; (ii) it was successfully rated AAA by Moody’s and Fitch; and (iii) it is expected that the programme established by KB Kookmin Bank will serve as a model for any similar financing to be arranged by other financial institutions in Korea in the future.