Issues five-year Formosa bond, cutting rate by 3 basis points from last year

Funds to back US floating LNG export terminal, New Jersey logistics center

Move aims to offset Hormuz uncertainty, support energy, petrochemical product shipping

The Korea Ocean Business Corporation built an 18-meter ultra-large media wall and an immersive exhibition space at the National Maritime Museum. An Byung-gil, president of the Korea Ocean Business Corporation, delivers a congratulatory speech at the opening ceremony on Aug. 25. (Korea Ocean Business Corporation)
The Korea Ocean Business Corporation built an 18-meter ultra-large media wall and an immersive exhibition space at the National Maritime Museum. An Byung-gil, president of the Korea Ocean Business Corporation, delivers a congratulatory speech at the opening ceremony on Aug. 25. (Korea Ocean Business Corporation)

The Korea Ocean Business Corporation will invest in overseas infrastructure, including a US liquefied natural gas export terminal and a logistics center, after raising $300 million in Taiwan's financial market. The state-run corporation will also funnel some of the funds into helping South Korean shipping companies secure vessels to transport energy and petrochemical products. The move comes as uncertainty grows over key maritime routes such as the Strait of Hormuz.

The Korea Ocean Business Corporation, or KOBC, said Wednesday that it had issued a five-year, $300 million US dollar-denominated Formosa bond.

Formosa bonds are foreign-currency-denominated bonds issued by overseas institutions in Taiwan's financial market. This marks KOBC's fourth Formosa bond issuance since it first tapped the market in 2023.

The bond's interest rate was 3 basis points lower than last year's, equivalent to a 0.03 percentage point decrease, as 1 basis point equals 0.01 percentage point. KOBC said its annual bond issuances in the Formosa market had expanded its investor base, helping to lower funding costs. The rate is among the lowest for Formosa bonds issued by South Korean public institutions, according to KOBC.

The foreign currency raised will go toward South Korean maritime companies' overseas projects and domestic shipping firms' key cargo transport projects.

KOBC plans to first invest in overseas maritime and logistics infrastructure projects. These include a floating LNG export terminal and a logistics center in New Jersey, both under development in the US. The move is intended to support South Korean maritime companies' expansion abroad.

The corporation will also supply funds to help South Korean shipping companies secure vessels. The support is meant to ensure a stable supply of ships capable of transporting nationally important cargo, such as energy and petrochemical products. The move responds to growing uncertainty over major maritime routes, including the Strait of Hormuz.

An Byung-gil, president of KOBC, said, "Stable foreign currency funding is an important foundation for supporting the overseas expansion of our maritime companies and the stability of the nation's maritime supply chain." He added, "We will continue to diversify our funding markets and investor base to support our maritime companies' overseas expansion and the stability of the national maritime supply chain going forward."


adastra@heraldcorp.com