Banks Cut Financing Costs for SK Hynix Korea Leveraged Trades to SOFR Plus 150-300 bps
Global banks have cut financing costs for leveraged bets on SK Hynix's Korean shares to about 150-300 basis points over SOFR, halving from more than 1,000 basis points in mid-June. The reduction follows the company's US ADR listing and a tech sell-off that eased demand. SOFR has stayed between 3.5% and 3.69% since May 1. Banks including BofA, Citi, Goldman and JPMorgan are now seeking new swap business after previously rejecting clients.
Financing costs for global investors taking leveraged positions in SK Hynix's Korean shares have halved in recent weeks, following the company's US listing and a sharp sell-off in artificial intelligence-related stocks. In mid-June 2026, some banks were quoting clients seeking new or renewed SK Hynix swap contracts at more than 1,000 basis points over the Secured Overnight Financing Rate (SOFR). SOFR has hovered between 3.5% and 3.69% since May 1.
Several banks, including Bank of America, Citigroup, Goldman Sachs and JPMorgan, are now offering clients about 150-300 basis points over SOFR for swap trades that provide exposure to SK Hynix's Korean shares. Previously, banks had charged extremely high rates or outright rejected some requests due to limited capacity for SK Hynix stock swap business. Some banks that had turned away clients are now seeking new business.
The change reflects adjustments on both the supply and demand sides. SK Hynix's issuance of American depositary receipts in July gave investors another way to bet on the chipmaker, while the July tech-stock rout reduced some leveraged bets on the stock. The trend suggests that concerns about banks' concentration risk have eased in recent weeks.