SK Hynix Confirms $1.7 Billion Overseas Convertible Bonds Issuance

SK Hynix is increasing the size of its overseas exchangeable bonds (EB) issued through its treasury shares to $1.7 billion. The funds are planned to be used for operating expenses such as raw material purchases.

On the 4th, SK Hynix announced that "this was decided through investor recruitment following a board resolution." The company had previously disclosed the EB size as $1.5 billion the day before but later changed the issuance conditions and corrected the disclosure. EB is a bond issued by a company secured by its treasury shares.

The issuance amount is calculated at an exchange rate of 1,316.3 KRW per dollar, totaling 2.2377 trillion KRW. The exchange target is 20,126,911 shares held, which accounts for 2.8% of the total number of shares. The exchange price was set at 111,180 KRW, which is 127.5% of the previous day's closing price (87,200 KRW) of the shares listed on the Korea Exchange, considering the exchange premium.

[Image source=Yonhap News]

원본보기 아이콘

SK Hynix will list the EB on the Singapore Exchange. The nominal and maturity interest rates are both 1.75% per annum. The maturity date is April 11, 2030, seven years after the issuance date (April 11). SK Hynix stated that early redemption is possible through the company's call option and bondholders' put option.

Due to the semiconductor industry's downturn and challenging business environment, SK Hynix issued bonds this year to secure funds. The company said, "The procured funds will be used for operating expenses such as raw material purchases."

According to FnGuide, a financial information provider, the average sales forecast for SK Hynix in the first quarter is 4.9118 trillion KRW, a 59.59% decrease compared to the same period last year. An operating loss of 3.558 trillion KRW is also expected. Securities firms predict that negative growth will continue after the fourth quarter of last year.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.