South Korea’s leading mobile carrier KT Corp. on Wednesday raised $400 million in 10-year dollar-denominated bonds at the cheapest cost among Korean private companies, underscoring foreign investors’ huge appetite for blue-chip Korean debt.

Korean utility firm Korea Gas Corp. on the previous day also priced $900 million dollar-denominated bonds at the cheapest rate among public entities after its dual-tranche issues drew overwhelming demand of $4 billion. Korean investment-grade companies have benefited from the volatilities in the European market following the British vote to leave the European Union that sent investors seeking for other safer options.

Demand for KT debt was even bigger. Book-building in New York, Hong Kong, and London drew bids worth $3.5 billion, doubling demand for the KOGAS offerings.

The coupon rate of the company’s 10-year bond was set cheaper than expected at 2.500 percent, 110 basis points over the same-year U.S. Treasury. The pricing is the lowest for offshore issues for Korean private enterprises.

The spread was 0.425 percentage point lower than Kia Motors Corp.’s 10-year debt issue in April, which would save KT interest cost of nearly 2 billion won ($1.74 million) a year for its $400 million debt.

KT was preferred by foreign investors because it is a telecommunication service operator, a business that investors tend to find stable and lucrative, according to industry sources.

KT’s debt is rated A- by Standard & Poor’s and Fitch and Baa1 by Moody’s Investors Service with a positive outlook that suggests upgrade in near future.

Global markets are brimming with easy liquidity from quantitative easing and ultra-low or negative interest rates in major economies. Korean blue-chip notes have become popular following upgrade in sovereign rating amid volatilities in international currencies and oil prices.

Demand for KOGAS and KT’s offshore issues over the last two days reached $7.5 billion. Kia Motors in April drew $12 billion bids for its $700 million global bonds.

Utility firm Korea Western Power Co. that is next in the pipeline is hopeful for equally successful issue.

By Ko Min-suh

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]