| Kimchi bond | |
| Hangul | 김치본드; 김치채권 |
|---|---|
| Hanja | (none); 김치債券 |
| RR | gimchi bondeu; gimchi chaegwon |
| MR | kimch'i pondŭ; kimch'i ch'aekwŏn |
AKimchi bond is a non-won-denominated financial bond issued in theSouth Korean market. The name refers tokimchi, 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 theMinistry of Finance and Economy.[2][3] However, in practice, 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, aUS$100 million two-yearfloating rate note sold by South Korean companySK Global, but the first foreign company to sell non-won-denominated bonds in the South Korean market wasBear Stearns.[2][4] Although foreign firms had long been permitted to issue won-denominated bonds, typically referred to asArirang 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]