Hana Bank issues $300m Formosa bond, returns to Taiwan market after 7 years

Hana Bank said Tuesday it had successfully issued a $300 million, five-year Formosa bond at the lowest spread in its history. The strong result, achieved despite heightened volatility in global financial markets, confirmed solid confidence among overseas investors.

The issuance marks Hana Bank's return to the Taiwan market roughly seven years after it issued a $400 million Formosa bond in June 2019. The bank priced the new bond at a spread of 68 basis points — below the 70bp level widely regarded as a psychological resistance threshold in the Taiwan market — setting a new pricing benchmark.

The final rate was set at the Secured Overnight Financing Rate plus 68bp, 27bp tighter than the initial price guidance of 95bp. The bond was issued as a five-year floating-rate note.

A Formosa bond is a bond issued in Taiwan's capital market by a foreign institution in a foreign currency rather than the Taiwan dollar. The instrument is characterized by its ability to secure stable demand from a select group of core investors, allowing issuers to raise funds at competitive rates.

Ahead of the issuance, Hana Bank held investor roadshows targeting key investors in Hong Kong and Taiwan to broaden its investment base. Despite elevated volatility in global financial markets driven by geopolitical risks in the Middle East, the bank attracted effective demand of $980 million.

"We plan to further diversify our global foreign-currency funding channels on the back of this issuance, and will continue to expand a stable foreign-currency funding base by utilizing a variety of currencies and products," the bank said.