UPDATE 1-S.Korea's KEXIM to sell 1 bln rgt bonds this week

(Updates with details, background)

HONG KONG, Feb 25 (Reuters) - Export-Import Bank of Korea (KEXIM) plans to sell 1 billion ringgit ($310.9 million) worth of bonds this week, a source said on Monday, in what could be the first South Korean issuer to tap the Malaysian market.

"At this moment we expect pricing on Friday this week, with settlement in early March," said the source, who is directly involved in the deal but is not authorised to speak to the media.

The long-expected deal was launched late on Feb. 22, and will consist of five-year and 10-year tranches, the source added.

The global credit crisis and the prospect of a U.S. recession have raised the price of borrowing in dollars -- long the preferred market for Asian issuers -- sending them scouring the world for niche markets that can provide cheaper debt.

KEXIM has been among the boldest in tapping markets that had previously attracted little interest from Asian issuers, having done a deal in Mexican pesos last year in what was a first from the region. It followed that with a second one this year.

Malaysia has attracted the interest of several other issuers, including South Korean lenders Kookmin Bank 06000.KS, although nobody else has yet launched a ringgit bond deal.

The country has one of the lowest interest rates in Asia, with the central bank expected to keep rates unchanged at 3.5 percent at its meeting on Monday as low credit costs have been the linchpin of the economy.

The KEXIM deal could be key in determining whether other Asian issuers will tap the ringgit bond market, although bankers have warned not everybody will be able to do a deal.