Republic of Korea launches $1 billion benchmark bond

The Republic of Korea returned to offshore debt markets on Wednesday with a rare $1 billion bond, aimed at paving the way for other South Korea issuers to tap the market.

Asia's credit markets have been volatile since Ben Bernanke hinted that the Fed would reduce its vast purchases of US Treasuries in May, spelling an end to low interest rates. The Korean sovereign was the first borrower to tap the market after the summer lull.

“We sought to establish a liquid benchmark for other Korean issuers,” Heenam Choi, director general of the International Finance Division at Ministry of Strategy and Finance of Korea, told FinanceAsia...