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Biz News Korea(Eng)
S. Korean companies turns to overseas debt market to raise funds
- Collected
- 2016.04.21
- Distributed
- 2016.04.22
- Source
- Go Direct
Latest on the pipeline were Hanwha Chemical Corp., Kia Motors Corp. and Doosan Heavy Industries & Construction Co., according to investment bank sources Tuesday.
Hanwha Chemical issued $100 million in three-year floating-rate note (FRN) on Apr. 7 to repay maturing $70 million issue of three years ago and loan from the Export-Import Bank of Korea (Korea Eximbank).
The floater was issued at a coupon of 2.27 percent, or 1.65 percentage points over the three-month London Interbank Offered Rate (Libor) of 0.62 percent. Hanwha Chemical raised the fund at a cheaper rate than 2.697 percent in its local issue in February with similar maturity. The company raised $50 million overseas in October last year.
“It is not easy for an A- or sub-grade company to raise capital from local market. The conditions are better overseas,” said an unnamed Hanwha Chemical official. During the February issue in the local market, 13 billion won ($11.4 million) worth was undersubscribed due to poor demand.
In contrast, Kia Motors recently tapped demand ahead of $700 million issues in five and 10-year maturity and was overwhelmed with bids of more than $10 billion.
Doosan Heavy Industries & Construction raised $800 million from overseas markets last year - $500 million in Eurobond in April at a yield of 2.259 percent and $300 million in 30-year hybrid bond at 2.589 percent.
By Kim Hye-soon
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