[Edaily Marketin Reporter KIM YEON-SEO ] E-Land World (BBB0) is set to issue up to 40 billion won in public corporate bonds. With investor sentiment toward BBB-rated corporate bonds currently subdued, all eyes are on whether the company can secure investor demand by highlighting the growth of its value-for-money fashion brands—such as SPAO—and its restaurant business centered on Ashley.

According to investment banking (IB) industry sources on the 7th, E-Land World is proceeding with the issuance of 20 billion won worth of one-year corporate bonds. Depending on the results of the bookbuilding process, the company plans to increase the issuance amount to a maximum of 40 billion won.

The target interest rate band for the public offering has been set at -30 to +30 basis points (bps; 1 bp = 0.01 percentage point) relative to the ratings provided by individual private bond rating agencies. Kyobo Securities is serving as the sole lead underwriter, and the scheduled issuance date is the 27th of this month.

The funds raised through this corporate bond issuance are expected to be used to repay existing corporate bonds. According to BondWeb, E-Land World has corporate bonds totaling 75 billion won maturing this month.

“E-Land World 106-1,” issued on August 29 of last year, matures on the 28th. The issue amount was 15 billion won, and the coupon rate is 6.6% per annum. “E-Land World 104,” issued on February 27 of last year, matures on the 27th, with a coupon rate of 6.23% per annum.

Korea Corporate Rating and NICE Credit Rating have assigned E-Land World a credit rating of “BBB0” with a “Stable” outlook. A BBB rating indicates that the certainty of principal and interest payments is recognized, but it also implies the possibility that payment capacity could deteriorate depending on future environmental changes. A “Stable” outlook means there is a low probability that the credit rating will change within the next one to two years.

Improving Scale and Profitability Led by SPAO and Ashley

Amid a sluggish economy and ongoing polarization in consumer spending, E-Land World continues to grow, driven primarily by its value-for-money fashion and foodservice businesses.

According to Korea Ratings, E-Land World’s consolidated revenue last year reached 5.5434 trillion won, a 1.7% increase from the previous year. Operating profit rose 22.8% during the same period, from 271.4 billion won to 333.3 billion won.

The fashion, food service, and leisure divisions drove the overall improvement in performance. The fashion division enhanced inventory management efficiency by expanding its three major integrated manufacturing and retail (SPA) brands—SPAO, MISO, and Hwayu—and refining its responsive production system. As a result, operating profit rose 9.9% from 228.9 billion won to 251.5 billion won.

E-Land Eats, which oversees the foodservice division, expanded its brand lineup to include “Deli by Ashley” and “Roun” while Ashley continued to post strong results. Cost savings achieved through consolidated raw material procurement also contributed to profit growth.

E-Land Park, the leisure division, also saw a significant improvement in operating profit as average revenue per guest and occupancy rates rose following room renovations. The retail division continued to face structural challenges due to declining foot traffic at brick-and-mortar stores, but profitability began to recover starting in the second half of last year as the effects of restructuring inefficient operations took hold.

Operating Improvements, but Heavy Debt Burden Persists

However, high debt and interest burdens

remain

factors constraining creditworthiness and investor sentiment. Although E-Land World’s net debt decreased by 47.9 billion won compared to the end of the previous year as free cash flow turned positive in 2025, the financial burden—which had expanded due to past investments and the repayment of hybrid capital securities—continues to weigh on the company.

In 2023, despite a positive free cash flow, net debt increased by 84.8 billion won as the company invested 82.5 billion won in acquiring shares of affiliates related to Toss and the Youth Rental Housing REIT and repaid 36.8 billion won in hybrid capital securities. In 2024, net debt expanded by 378.7 billion won due to a combination of a negative free cash flow and the repayment of approximately 135 billion won in hybrid capital securities by E-Land Park.

Last year, driven by a return to positive free cash flow, the company managed to slightly reduce net debt despite investments in lease assets, land acquisitions for public rental housing development projects, and the acquisition of REIT stakes. However, considering ongoing investment needs and high financing costs, the pace of financial restructuring is expected to be limited.

Net losses have also persisted due to interest burdens and non-recurring losses. In 2024, interest expenses rose by 61.8 billion won year-over-year to 296.7 billion won, driven by increased borrowing and high interest rates. A net loss of 150.6 billion won was recorded after reflecting a 15.4 billion won impairment loss on E-Land Retail’s investment in Oasis and a 9.9 billion won write-off of advance payments.

Last year, although improved operating profit covered interest expenses, the net loss widened to 261.8 billion won due to the one-time recognition of approximately 280 billion won in disaster-related losses at the Cheonan logistics center.

The revaluation of land assets helped stabilize financial metrics. E-Land World revalues its land holdings on a three-year cycle. In 2021, the company recognized a revaluation gain of 871.5 billion won, which reduced the debt-to-equity ratio from 205.7% to 173.7% and the debt dependency ratio from 51.2% to 46.5%. In 2024 as well, the company reflected a revaluation gain of 967.4 billion won, causing the debt-to-equity ratio and debt dependency ratio to fall from 205.7% to 170.5% and from 47.6% to 45.2%, respectively.

Oh Da-yeon, a senior researcher at Korea Ratings, predicted, “Earnings are expected to improve gradually due to a stable fashion business and restructuring of the retail operations,” adding, “The company will control its financial burden by covering routine investment needs with its own funds.” She continued, “We plan to monitor the impact of the fire at the Cheonan logistics center on profitability and the financial structure.”