[Photo: Shinhan Card]
Shinhan Card has successfully issued a Formosa bond structured as a floating-rate note (FRN), becoming the first non-bank financial institution in South Korea to do so. Despite increased global interest rate volatility, the company attracted strong investor demand, achieving a record-low funding rate.
On June 10, Shinhan Card announced the public issuance of a $400 million (approximately 613.2 billion won) Formosa bond. A Formosa bond is a debt security issued in Taiwan by foreign financial institutions or corporations in foreign currencies such as U.S. dollars.
This bond has a maturity of 3.5 years and the interest rate was set at SOFR (Secured Overnight Financing Rate) plus 0.82 percentage points. Even when converted to a fixed-rate basis, this represents the lowest spread among Formosa bonds issued by domestic non-bank financial institutions.
The demand forecast revealed orders totaling $1.69 billion, more than four times the issuance amount. Over 60 major institutional investors from Asia, including local banks and securities firms in Taiwan, showed significant interest.
As a result, Shinhan Card finalized the interest rate approximately 33 basis points lower than the initial guidance. This marks Shinhan Card's third issuance of a Formosa bond.
Shinhan Card explained that its strategy of adopting a floating-rate structure and engaging in proactive communication with Taiwanese investors helped secure demand amid market volatility.
A Shinhan Card official stated, "The issuance of this floating-rate Formosa bond adds a new funding option for domestic issuers, including non-bank entities. We will continue to leverage the global bond market to establish a stable funding base."
* This article has been translated by AI.
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