News1
[[B1]] The Export-Import Bank of Korea (Korea Eximbank) wasted as much as 30.1 billion won ($21.7 million) by keeping the fee rate on its foreign-currency bonds fixed unnecessarily, an audit found.
[[B2]] According to results of a regular audit by the Board of Audit and Inspection released on the 18th, Korea Eximbank paid 142.4 billion won in fees to investment banks selected as lead managers while issuing about 47.7 trillion won worth of foreign-currency bonds over the past five years. The fee rate had been fixed at 30 basis points of the bond issuance amount (1 basis point equals 0.01 percentage point) since 2010. However, when the audit board analyzed the fee rates of 36 bond issuers similar to Korea Eximbank, it found that the market applied lower rates for shorter maturities and for issuers with higher credit ratings.
[[B3]] The audit board estimated that Korea Eximbank could have saved about 8.5 billion to 30.1 billion won over five years had it applied differentiated fees by maturity to reflect market prices. “Korea Eximbank ranks first in Korea and second in Asia by bond issuance volume, and as an SSA-class issuer with high bond creditworthiness, it held ample bargaining power,” the audit board said. “As a major issuer, it needs to calculate appropriate fees by comprehensively considering its bargaining power and fluctuating issuance costs, and to reduce fees through competition.”
[[B4]] Separately, Korea Eximbank was found to have over-collected a total of 7.78 billion won by improperly passing on an education tax that it should have borne itself to borrowers.