Hyundai Capital America Inc. on Thursday sold $2 billion notes in multi tranche, backed by leases of cars sold by its sister finished carmakers Hyundai Motor and Kia Motors at better-than-expected rates in the backdrop of coronavirus outbreak.
The auto financing unit initially planned a maximum $1.5 billion in bond offering but increased the size after drawing unexpected demand of over $10 billion during the book building.
It sold $1 billion in three-year, $500 million in five-year, and $500 million in seven-year maturities, which is the largest of all global bond offerings by a Hyundai Motor Group unit in history.
The coupon was set at 0.23-0.30 percentage point lower than its targets – 95 basis points over the three-year U.S. treasury yield, 122.5 basis points above the five-year note, and 147.5 basis points higher than the seven-year benchmark.
The latest offering is seen as a significant achievement at a time of rising market uncertainties from coronavirus concerns across the world. Experts say investment sentiment started to improve on expectations that the infectious disease could possibly be in control soon with development of a treatment.
Quasi sovereign debt-grade entities Korea Development Bank (KDB) and the Korea Resources Corporation will go on with debt offerings this month as initially planned.
By Kang Woo-seok and Lee Ha-yeon
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