KT Corporate Bonds Surge in Popularity... Largest Fundraising Since 2012

15 trillion 885 billion won raised against 150 billion won target
‘AAA’ top-grade bonds prove popularity … Overwhelming SKT record

[Asia Economy Reporter Hwang Yoon-joo] KT sparked a sensation in its first corporate bond demand forecast of the new year. It raised over 2.8 trillion KRW against a target of 150 billion KRW. This is the largest amount since the introduction of public corporate bond demand forecasts in 2012.

According to the investment banking (IB) industry on the 4th, KT, with a credit rating of 'AAA', attracted funds amounting to 2.885 trillion KRW, about 19.2 times the target amount of 150 billion KRW in its corporate bond demand forecast.

Initially, the plan was to raise 40 billion KRW for 2-year bonds, 70 billion KRW for 3-year bonds, and 40 billion KRW for 5-year bonds, but institutional demand surged. Accordingly, the issuance size is expected to increase to a total of 190 billion KRW, with 70 billion KRW for 2-year bonds, 70 billion KRW for 3-year bonds, and 50 billion KRW for 5-year bonds.

The issuance interest rate is also noteworthy. For the 5-year corporate bonds, the demand was closed at a level 100 basis points (1.0%) lower than the individual market average interest rate based on the initial registration amount of 40 billion KRW.

Both KT and the lead underwriters are encouraged by the success that exceeded expectations. It is evaluated to have outperformed SK Telecom, which drew attention with its demand forecast success in December last year. SK Telecom issued corporate bonds worth 250 billion KRW with orders totaling 1.935 trillion KRW, at an interest rate 52 basis points lower than the market average rate, at 4.734% (3-year bonds).

An IB official said, "Thanks to demand from pension funds, insurance companies, and asset management firms, the market sentiment has improved," adding, "Considering the early-year effect and the government's market support policies, KT, along with SK Telecom, is the only domestic company with an 'AAA' credit rating, which attracted such strong demand."

Meanwhile, Emart, rated 'AA', received orders worth 1.175 trillion KRW against a target of 200 billion KRW. Initially, it planned to raise 50 billion KRW for 2-year bonds and 150 billion KRW for 3-year bonds, but 370 billion KRW and 805 billion KRW were attracted respectively.

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