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Biz News Korea(Eng)
Korea’s Kakao mulls 400 billion won bond and CP issue to pay off short-term debt
- Collected
- 2016.03.21
- Distributed
- 2016.03.22
- Source
- Go Direct
According to investment banking sources Monday, Kakao is mulling 200 billion won corporate bond issues in three-year and five-year maturity. It will likely up the issue value depending on the demand in book-building process. It is also planning CP issues in a similar amount to cover more than half of the loans it raised for Loen takeover.
Kakao, which acquired a 76.4 percent stake in Loen Entertainment for 1.87 trillion won, took out 800 billion won loans from Samsung Co. and Korea Investment Securities Co. and offered right offering worth 750 billion won. Its short-term debt ballooned to 803.7 billion won from the pre-acquisition level of 3.8 billion won.
A 6-month loan requires 2.36 percent in fixed interest rate, while bonds and CPs can be cheaper. According to the Korea Financial Investment Association, the yield on three-year AA- investment-grade bonds was at 1.981 percent as of Friday.
Kakao would be able to strengthen its balance sheet that temporarily worsened following the acquisition through its new fund-raising plan, observed Um Chung-won, a researcher at Korea Ratings Corporation.
By Kim Hye-soon, Chun Gyung-woon
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]