Dongseo Power Generation Issues 1.75% Interest Global Bonds..."Lowest Among Public Institutions"

"Lowest Ever 5-Year USD Bonds by Public Institutions... Savings of 23.1 Billion KRW"

[Asia Economy Reporter Moon Chaeseok] Korea East-West Power recently announced on the 4th that it issued a 5-year maturity global bond (144A/RegS) worth 500 million dollars at an interest rate of 1.75%, amid the sluggish Asian dollar issuance market and increased financial market volatility caused by the spread of the novel coronavirus disease (COVID-19). By issuing the bond at the lowest interest rate among 5-year US dollar bonds ever issued by public institutions, it saved 23.1 billion KRW.

East-West Power stated that it issued the bond on the 27th of last month at a price 40 basis points (1bp=0.01%) lower than the initial price guidance (IPG). This was thanks to strong demand from investors, with subscription orders totaling 3.85 billion dollars, 7.7 times the issuance size. Although it returned to the Korean bond market after two years, it issued the bond at about 5 basis points lower than the secondary market yield without a new issuance premium (NIP). Compared to issuing won-denominated bonds under the same conditions, it is expected to reduce financial costs by about 23.1 billion KRW over five years.

As it became difficult to hold overseas investor briefings, East-West Power held a conference call briefing on the 23rd and 24th of last month, explaining management performance including financial stability to about 40 investment institutions. In particular, East-West Power explained that it shortened the period from the announcement of the issuance plan to the briefing and price determination to minimize the risk of exposure to market volatility and to capture a stable timing in the bond market, maximizing investor interest. It actively appealed to investors that this was the first 5-year fixed-rate US dollar public bond issued by a domestic public institution since COVID-19.

East-West Power plans to use the funds raised this time to refinance a 500 million dollar global bond maturing on the 2nd of next month. A representative of East-West Power expressed expectations, saying, "The success of this bond issuance will provide a benchmark for Korean companies preparing future issuances and serve as a catalyst for creating a favorable environment in the issuance market."

This content was produced with the assistance of AI translation services.