J.P. Morgan & Co. ran into difficulty Wednesday marketing a $2 billion bond deal for Korean Development Bank, sources said.
Traders said investors were wary of any debt backed by Asian assets and that the bank was trying to devise alternative structures because it appeared investors would require a spread of 400 basis points over Treasuries.
Morgan's investment bankers had expected to bring the three-year deal at a spread of 325 to 350 basis points over three-year Treasuries.
Morgan delayed and then canceled an investor conference call related to the deal Wednesday, and did not respond to requests for comment.
Moody's Investors Service downgraded Korea's foreign currency rating for bonds and notes to BAA2 from A3. As a result all of Korea's 29 banks, including Korean Development Bank, will be downgraded.