A newly established vehicle tasked with managing Seoul's $350 billion investment commitment to Washington is exploring its first foray into the bond market, offering an early glimpse into how South Korea plans to fund the largest financial pledge under the bilateral trade pact.

According to sources familiar with the matter, the Korea-US Strategic Investment Company has this week circulated a request for proposals for its initial dollar-denominated bond sale, with the potential issuance size reaching up to $2 billion. The individuals, who requested anonymity as the details are not public, noted the talks remain in preliminary stages. The entity declined to comment on the matter.

Established in June, the institution is responsible for coordinating South Korean project investments in the United States. The sluggish pace of capital deployment has emerged as a friction point between the two governments. Both sides are currently in the process of selecting the first project under the $350 billion investment framework, which forms part of a trade agreement imposing a 15% tariff on South Korean exports to the U.S.

“If this bond sale materializes, the entity will become a major issuer in South Korea’s international bond market, with influence comparable to other top domestic borrowers,” said Ha Hyung-min, a credit analyst at Hana Securities. “The issuer is likely to gradually establish a track record and continue issuing debt to fund U.S. project investments.”

The sources indicated the vehicle plans to launch the bond issuance early next year, with the selection of underwriting banks expected to be finalized by the end of this month. They added that as discussions are still at an early stage, the specifics of the financing plan could shift.

While the South Korean government has yet to finalize the first project under the investment initiative, local media reports suggest a gas-fired power plant project in Texas has been earmarked as the initial investment target.