Kookmin sold the first covered bond to be launched under dedicated South Korean legislation yesterday (Wednesday), printing a $500m (Eu438m, Won572.1bn) 144A/Reg S issue at 90bp over mid-swaps.

The long-awaited debut has been anticipated since the issuer completed a roadshow promoting a new $8bn programme on 25 June. The South Korean legislative framework took effect last year.

Leads BNP Paribas, Citi and Société Générale launched the deal with initial price thoughts of the low 90s over mid-swaps area, before setting guidance of the 90bp area after the US market opened.

Books closed at around $800m from 32 accounts, with investors from the US taking 51% of the deal, the EMEA 38% and Asia 11%. Funds and asset managers were allocated 40%, central banks and official institutions 32%, banks 19% and pension funds and insurance companies 9%.

A banker at one of the leads said they had when pricing the new issue used as a comparable a $1bn three year issue from Singaporean issuer DBS Bank, which was priced at 37bp over mid-swaps on 29 July and was quoted at a Z-spread of 50bp.

They also listed among the comparables a $1.75bn five year issue from RBC, which was priced at 72bp on Tuesday of last week (6 October) and was quoted at 71bp, while 2020 issues from Bank of Nova Scotia, CBA and ANZ were all quoted between 60bp-63bp.

Syndicate officials away from the leads said Kookmin’s new issue offered an attractive pick-up versus recent dollar issues.

The leads also used as comparables 2020 senior issues from Export-Import Bank of Korea, Woori Bank, Shinhan Bank and Korea Development Bank, which were seen at Z-spreads from 89bp-111bp.

Kookmin has issued a covered bond previously, selling a $1bn deal in 2009. However, that was done on a contractual basis and the only other issuance from the country has been by Korea Housing Finance Corporation under legislation specific to the state-owned institution and which pooled collateral from several Korean banks.