South Korea’s Eurobond Issuance: How Does Geopolitical Risk Shape Bond Yields, Pricing?

PRS/ICRG has worked for several years with entities within South Korea to address governance issues and overall investment climate.  So, it’s great to see the government, after the recent volatility – and the election of President Lee Jae Myung – launching its first euro-denominated bond sale in some four years.

As reported in Bloomberg this morning, the sovereign is marking three-year notes at around 40bps over mid-swaps and a seven-year tranche at around 70bps above the benchmark. (https://www.bloomberg.com/news/articles/2025-06-26/south-korea-kicks-off-first-euro-bond-sale-in-nearly-four-years?srnd=phx-fixed-income)

Our ICRG data has a long history of helping price sovereign notes, and the literature on the subject is quite deep.  As noted in a recent study on political risk and debt sustainability, ‘ICRG is an economically and statistically significant determinant of sovereign bond yields and growth, even when controlling for several macroeconomic, governmental and external variables.’ (https://www.bruegel.org/sites/default/files/2025-01/WP%2001%202025_0.pdf)

Our data drives

The PRS Group.com