A newly created entity at the heart of South Korea’s US$350 billion (RM1.43 trillion) US investment pledge is considering heading to the bond market for the first time, offering an early glimpse into how Seoul plans to finance one of the largest commitments in its trade deal with Washington.
The Korea-US Strategic Investment Corporation (KUIC) this week sent out requests for proposals for a debut dollar bond issuance, according to people familiar with the matter. The size of the deal could be as much as US$2 billion, the people said, who asked not to be identified discussing private matters.
The KUIC declined to comment.
Established in June, the organisation was created to oversee implementation of South Korea’s investments in American projects, whose slow pace has become a source of friction between the two countries. Seoul and Washington are in the midst of selecting the first project under the US$350 billion investment framework pledged as part of a trade deal that set US tariffs on South Korean exports at 15%.
“If the issuance goes ahead, the organisation will become a big issuer in South Korea’s international bond market, putting it on a par with other top issuers in the country in terms of its impact,” said Hyeongmin Ha, a credit analyst at Hana Securities. “The issuer is likely to build a track record and continue to issue bonds for the financing needed for investment in the US.”
The organisation is looking to sell the bonds early next year, and could mandate arranging banks as soon as the end of this month, the people said. Discussions are in early stages and details of the financing could still change, the people added.
The South Korean government has said the first project under the US investment package has yet to be finalised, although local media reported that a gas-fired power project in Texas has been selected as the inaugural investment.
Source: Theedgemalaysia