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This article appeared on July 29, 2026 at 14:46 on the capital markets compass 'Signal.'
Korean Air (003490), on the cusp of its merger with Asiana Airlines, has launched a dollar-funding drive following its yen issuance. While Korean Air has previously issued dollar bonds backed by guarantees from state-run banks, this time it secured a guarantee from KB Kookmin Bank for the first time. The deal is seen as having materialized after Kookmin Bank offered more aggressive guarantee terms than the state banks, factoring in the global stature of the merged Korean Air.
According to the investment banking (IB) industry on the 29th, Korean Air plans to wrap up procedures to raise at least $300 million (about 435 billion won) as early as this week. The company recently signed underwriting agreements with Citigroup Global Markets Securities, Bank of America, Deutsche Bank, and KB Securities, and has begun marketing to overseas institutional investors. The deal comes less than a month after it raised 20 billion yen from Japanese investors earlier this month.
Korean Air decided to obtain a payment guarantee from Kookmin Bank for its dollar funding. Issuing foreign-currency bonds to multiple overseas institutions requires ratings from the three global credit rating agencies (Moody's, S&P, and Fitch), but Korean Air has never undergone such a separate assessment. Judging by its financial strength over the past several years alone, securing an investment-grade rating would be difficult, so it has sought guarantees from the Export-Import Bank of Korea and the Korea Development Bank each time it issued foreign-currency bonds. When it issued yen bonds (samurai bonds) in Japan earlier this month, it also received a payment guarantee from the Export-Import Bank.
Aggressive sales efforts are being cited as the backdrop for Kookmin Bank's entry as a new guarantor. The market is noting that Kookmin Bank has consistently courted Korean Air over the past several years. It is observed that this time, too, the bank landed the role by offering favorable guarantee fees to Korean Air ahead of the state banks. An IB industry official explained, "From the point the merger of Korean Air and Asiana Airlines became visible, Kookmin Bank moved aggressively and offered better terms than the state banks."
This is interpreted as a preemptive move to strengthen ties, given the expected scale and global stature of the merged Korean Air. When the merger of Korean Air and Asiana Airlines is completed as of December 16 this year, a mega carrier ranked in the global top 10 will be launched in Korea. Domestic credit rating agencies, which rated Korean Air's credit at 'BBB+' through the end of 2023, have now raised it to 'A0, positive.' With Korean Air's financial and business position markedly enhanced, it is assessed to have become an attractive corporate client for commercial banks as well.
