Hanwha Co., Ltd. Launches Full-Scale Issuance of 70 Billion Won Public Bonds

[Asia Economy Reporter Hwang Yoon-joo] Hanwha Corporation submitted a securities registration statement to the Financial Supervisory Service on the 1st for the issuance of the 228th public bond. The initial registration amount is 70 billion KRW, and the lead underwriters are NH Investment & Securities and Korea Investment & Securities.

This public bond issuance is expected to smoothly attract demand, considering that the defense industry is a sector that has not been significantly affected by the economic downturn caused by COVID-19. In the 227th issuance last January, 530 billion KRW out of 100 billion KRW in demand forecasts were valid, achieving success, and a total of 150 billion KRW in public bonds were issued.

The underwriting group will conduct a demand forecast for institutional investors on the 4th, and if purchase orders exceeding the subscription amount are received, they plan to consider increasing the issuance up to 100 billion KRW. The raised funds will be used to repay borrowings maturing at the end of June.

Korea Ratings and NICE Investors Service maintained the credit rating of the 228th public bond at ‘A+ Stable,’ the same as before, considering the steady operating cash flow based on a stable business structure and excellent financial stability.

Additionally, Hanwha Corporation proposed an interest rate band of ‘-30bp to +70bp compared to the individual average yield.’ The previous issuance had a band of ‘-15bp to +15bp,’ but considering the market situation due to COVID-19, the upper limit of the interest rate band was set at a higher level.

Thanks to the solid credit rating based on a stable business structure and the interest rate band set more favorably to the market compared to before, some pension funds, asset management companies, and retail institutions are expected to actively participate in this demand forecast.

A market official explained, "Unlike many companies whose performance has declined due to COVID-19, defense companies have been less affected, and major defense companies recently showed good demand forecast results in the corporate bond market," adding, "As new orders increase due to the military’s introduction of advanced weapons, there are predictions that the performance of defense companies will improve compared to last year, so Hanwha Corporation’s public bond issuance also has a bright outlook."

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