“I had no idea I would meet girl group KARA on a flight to Tokyo. It was just an amazing coincidence. KARA played a big part in establishing the Samurai bond.” -Lee Jin Kyun, Director of International Banking at Export-Import Bank of Korea.
EX-IM Bank’s recently established Samurai bond (a yen-denominated bond issued in Tokyo by non-Japanese companies subject to Japanese regulations) worth over $1.3 billion US Dollars is being considered a record-breaking deal. It was originally planned to be worth only $630 million, but the amount doubled after the number of Japanese investors suddenly grew. Not only is this a large-scale establishment amongst finance and banking corporations in Korea, but in all of Asia.
It was a success in the Japanese market which is known to be rather difficult and particular, and girl group KARA is being credited with playing a big part in making it all happen.
EX-IM Bank’s relationship with KARA began about a year ago.
Last January, EX-IM Bank created a UriDashi Bond (うりだし債 bond denominated in a foreign currency and sold directly to Japanese household investors) for private investors, and it was then that PresidentKim Yong Hwan of EX-Im Bank met with Chairman Shin Yoshidome of Daiwa Securities Group, Inc.
Chairman Shin turned to President Kim and remarked, “My family is a fan of KARA. I heard they will be disbanding, is this true?” With a small laugh, Kim answered, “I think there’s some discord with their agency, but I don’t think they will be disbanding.”
It had only been 10 days since the rumors of KARA’s disbandment began circling in Korea, and it was then that President Kim truly realized KARA’s astounding fame in Japan.
President Kim shared this story with Choi Sung Hwan, one of the heads at EX-IM bank. Choi Sung Hwan then decided that he would use this to his advantage as he prepared the Non Deal Roadshow (NDR) for the establishment of the Samurai Bond.
During one of the meetings for NDR, Choi suggested that they hand out KARA CDs to the Japanese investors who are known to be rather solemn and serious. It would be their way of breaking the ice, and the employees boarded a plane to Tokyo after obtaining 50 KARA CDs.
But something rather amazing happened on the plane ride to Tokyo. In order to attend a performance in Japan, the ladies of KARA also boarded the very same plane as the bank employees.
The bank employees decided they would try and obtain autographs from the girls. Deputy head Yang Sae Ho grabbed 4 CDs and walked up to the second level of the plane where KARA were seated. A bit hesitant at first, he decided to introduce himself and explained that he wanted to present the autographed CDs to the Japanese investors.
KARA gladly agreed to his request, and member Nicole even remarked, “Thank you for preparing KARA CDs for such an event.” Yang wanted to receive autographs for all 4 CDs, however, the girls’ manager was concerned for KARA’s rest and only allowed autographs for 2 of the 4 CDs.
In Japan, a KARA CD autographed by one of the KARA members is worth nearly $1,200. With each additional member’s signature, the CD’s value increases by more than 200%. To further clarify, a KARA CD released in Korea that has been autographed by all five members is a truly rare and valuable item.
EX-IM presented one of the autographed CDs to Daiwa Securities Group Chairman Shin (supervisor). Upon receiving the autographed CD, he remarked, “My wife and daughter are huge fans of KARA, they will love this when I take it home to them.” Shin’s wife is known to be a big fan of the Hallyu culture, even taking trips to Korea.
The other CD was handed to Deutsche Securities‘ broker Shintaro Mori, also a supervisor. “My daughter and I are both fans of KARA,” he said, unable to hide his excitement.
Generally speaking, when a Korean corporation establishes a bond overseas with that country’s currency, the supervisors play a big part in the bond’s success. Though they have a business relationship, the supervisors’ efforts seemed to have played a big part in the major success of EX-IM Bank’s Samurai bond.
The remaining KARA CDs had a positive affect on the Japanese investors as well. Though they were not signed, all the investors regardless of age or gender became excited after receiving the gift.
After returning to Korea, the EX-IM Bank working group received a thank-you e-mail from Shintaro, who also visited in person to thank them.
On May 17th, EX-IM Bank established a 2-year Samurai bond of $653 million USD, a 3-year Samurai bond of $523 million USD, and a 5-year bond of $94 million USD. These are the largest bonds in the banking history of Asia, and there are only 5 global banking corporations that have established this kind of Samurai bond including JP Morgan, ANZ, HSBC, and 2 others.
