KB Kookmin Bank lands €650M covered bond at record-low spread
What's the deal? KB Kookmin BankDealroom has a profile for this one. Try Dealroom → has issued a four-year euro-denominated sustainable covered bond worth €650 million (about $750.1 million), its largest such issuance to date. The coupon was set at 3.625% per annum, a spread of 24 basis points over the euro mid-swap rate — the lowest in the bank's history.
Why now? The deal landed despite rising European interest rates and bond issuance fatigue. Even so, institutional demand reached 1.5 times the issuance amount.
Why it matters: Last year's four-year bond carried a spread of 36bp; this one came in 12bp lower. The absolute rate rose — the 2025 bond priced at 2.666% — but the tighter spread signals that European investors' confidence in the bank's creditworthiness has deepened.
The groundwork: Ahead of the issuance, KB Kookmin Bank ran a non-deal roadshow in early September across Germany, Luxembourg, and Switzerland, meeting more than 12 institutional investors, including the European Central BankDealroom has a profile for this one. Try Dealroom →. The bonds earned AAA ratings from both S&PDealroom has a profile for this one. Try Dealroom → and FitchDealroom has a profile for this one. Try Dealroom →, and proceeds will fund green and social projects.
What's the endgame? KB Kookmin Bank has tapped the euro covered bond market every year since becoming the first South Korean commercial bank to issue such bonds in July 2020. Its benchmark size has grown from around €500 million to €600 million in 2025, and now €650 million.
The signal: Covered bonds, backed by high-quality assets such as residential mortgages, offer issuers steadier funding terms. KB Kookmin Bank's steady annual return to the market — and its tightening spreads — shows a South Korean lender building durable credibility with European investors even in a tough funding climate.
Read more: finance.biggo.com
Image credit: Generated with Gemini
