Korean investment-grade issuers returning to debt market amid signs of recovery

2022.11.17 13:54:02 | 2022.11.17 13:55:11

[Provided by Maekyung Media Group]이미지 확대

[Provided by Maekyung Media Group]

SK Inc., the holding entity of South Korea’s third largest conglomerate SK Group, will offer 290 billion won ($216.9 million) in bonds next month as Korean companies are venturing back into the debt market amid signs of recovered demand thanks to state-led bond purchase and aid program

According to investment banking sources on Wednesday, SK is planning to hold a book-building session on Nov. 30 to tap institutional demand for 290 billion won worth bonds rated AA+ for issuance on Dec. 8.

“KB Securities will underwrite the debt. The coupon and maturity terms are being drawn up,” said a source from the investment banking industry.

An SK official confirmed the company is reviewing debt issuance at the end of this month.

SK Group’s holding entity sold a total of 370 billion won in bonds on Sept. 16 to refinance maturing debt. Its new issue could be a kind of litmus test to see whether the corporate debt market has recovered from a series of state-arranged emergency measures.

[Provided by Maekyung Media Group]이미지 확대

[Provided by Maekyung Media Group]

DGB Financial Group plans to issue 50 billion won worth 30-year hybrid securities rated AA- with an option to repay in five years after the issuance on Dec. 21. HI Investment & Securities will issue 150 billion won worth bonds guaranteed by DGB Financial Group on Dec. 29.

KEPCO on Tuesday sold 420 billion won worth two-year bonds at a coupon of 5.7 percent and 70 billion won worth in three-year maturity at 5.8 percent. Demand for two-year bonds improved from last coupon pricing at 5.9 percent.

The yield on three-year corporate bonds rated AA- rose to 5.416 percent on Wednesday. The spread between government bond and corporate bond yields widened to 1.608 percentage points from 1.094 percentage points as of the end of September.

By Kang Bong-jin and Lee Ha-yeon

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