[Edaily Marketin KIM YEON-SEO Reporter] HANJIN Logistics Corporation (BBB+) secured orders exceeding its target amount during its corporate bond bookbuilding, but was unable to avoid unsold shares in some tranches. Analysts suggest that the negative credit issues involving JR GLOBAL REIT and Joongang Group in the first half of the year, which had frozen investor sentiment toward BBB-rated issuers, have now affected even HANJIN Logistics Corporation, which is generally considered to be relatively creditworthy.

According to the investment banking (IB) industry on the 14th, HanjinTransportation(002320)received a total of 44 billion won in orders during its bookbuilding process for institutional investors aimed at issuing 40 billion won in public corporate bonds.

By tranche (maturity), orders totaling 19 billion won were received for the 1-year tranche (target: 20 billion won), and 25 billion won for the 1.5-year tranche (target: 20 billion won). While the total order amount exceeded the offering target, 1 billion won of the 1-year tranche remained unsold.

HANJIN Logistics Corporation set the target yield range for the 1-year tranche at -50 to +50 basis points (bps; 1 bp = 0.01 percentage point) relative to the yield assessed by individual private bond rating agencies, and for the 1.5-year notes, -40 to +40 bp relative to the individual private market average. The 1.5-year notes were fully subscribed at the individual private market average (PAR), while the 1-year notes failed to fully subscribe even at the upper end of the target yield band, which was +50 bp above the individual private market average.

HANJIN Logistics Corporation currently holds a BBB+ credit rating with a “positive” outlook. The market has long regarded it as a relatively high-quality credit among BBB-rated issuers. While some investors viewed the company as effectively close to an A-rated issuer, it was unable to fully overcome the subdued investment sentiment toward BBB-rated issuers.

Recently, institutional investors have become increasingly cautious in the BBB-rated corporate bond market as credit risks related to JR GLOBAL REIT and the Joongang Group have surfaced one after another. Analysts note that, regardless of individual companies’ creditworthiness, investment criteria for BBB-rated corporate bonds in general have become more conservative, making it difficult to secure investor demand even for short-term issues.

HANJIN Logistics Corporation plans to use the funds raised through this corporate bond issuance to repay existing debt. In its securities registration statement, HANJIN Logistics Corporation stated, “The 40 billion won raised through the 127-1st and 127-2nd unsecured bonds will be used for debt repayment,” adding, “Depending on the results of the bookbuilding process, the issuance amount may be increased by up to 80 billion won, and the additional amount will also be used for debt repayment.”