Kimchi bond
| Kimchi bond | |
| Hangul | 김치본드; 김치채권 (rare) |
|---|---|
| Hanja | none; 김치債券 |
| Revised Romanization | Gimchi Bondeu; Gimchi Chaegwon |
| McCune–Reischauer | Kimch'i Pondŭ; Kimch'i Ch'aekwŏn |
A Kimchi bond is a non-won-denominated bond issued in the South Korean market. The name refers to kimchi, a Korean side dish.[1] Woori Bank, which is credited with coining the term, defines it as solely referring to bonds from foreign issuers, a definition echoed by the Ministry of Finance and Economy.[2][3] However, in practise, the term is also used to refer to non-won-denominated bond issuance by domestic entities.[4][5] Deutsche Bank credits itself as having executed the first kimchi bond transaction, a US$100 million two-year floating rate note sold by South Korean company SK Global, but the first foreign company to sell non-won-denominated bonds in the South Korean market was Bear Stearns.[2][4] Although foreign firms had long been permitted to issue won-denominated bonds, typically referred to as Arirang bonds, permission for them to issue foreign currency-denominated bonds was slower in coming. Permission was finally granted due to the strength of the won in 2005.[3][6]
References
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