NH NongHyup Bank Issues 4 Trillion Won in Hybrid Capital Securities to Bolster Growth

NH NongHyup Bank said it successfully issued hybrid capital securities, or perpetual bonds, despite heightened market volatility tied to the Middle East situation.

The bank said April 30 it completed a 4 trillion won issuance.

The deal came as uncertainty grew at home and abroad, including geopolitical risks in the Middle East and a sharp rise in interest rates following a surprise in South Korea’s first-quarter gross domestic product.

Through investor relations efforts, the bank set the spread at 65 basis points, down 11 basis points from the 76 basis points on last year’s issuance. One basis point equals 0.01 percentage point.

Demand was strong. The bank initially sought 3 trillion won, but increased the size to 4 trillion won as institutional orders surged. The final yield was set at 4.33%. The securities are structured as perpetual bonds with a five-year call option, allowing early redemption at a specified time.

“Even in a market environment with significant rate volatility, we achieved meaningful issuance results through proactive investor relations and an expanded investor base,” Lee Sang-seon, the bank’s executive vice president for the financial markets division, said. “Based on the strengthened capital, we will enhance our stable growth foundation through preemptive capital ratio management.”