Korea First Bank (KFB) last week priced its third cross-border MBS of 2004 and, as was the case with its debut in March (see ASR, 4/5/04), the deal proved hugely popular with overseas buyers. It priced at Euribor plus 21 basis points.

BNP Paribas, Calyon and Royal Bank of Scotland ran joint books on the 550 million ($717.5 million) issue, the largest international deal to date from Korea, with Calyon also executing the swap. The paper could have been much larger but for issues getting the necessary approval from the Korean Ministry of Finance (MOF), according to one banker. All cross-border deals are subject to government clearance, and the MOF is seen as ultracautious on approving bigger transactions due to concerns over swaps' impact on the Won-Dollar rate.

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