[Edaily Marketin Reporter KIM YEON-SEO ] Woori Financial F&I (A0), an investment management company specializing in non-performing loans (NPLs), is set to issue corporate bonds worth up to 250 billion won. This move is seen as an effort to refinance 142 billion won in corporate bonds maturing this September.

According to investment banking (IB) industry sources on the 12th, Woori Financial F&I will conduct a bookbuilding process targeting institutional investors on the 1st of next month to issue corporate bonds totaling 150 billion won. Depending on the results of the bookbuilding, the company plans to increase the issuance amount to a maximum of 250 billion won.

The tranches (maturities) consist of 1.5-year, 2-year, and 3-year bonds. The target yield range for the public offering was set at –30 to +30 basis points (bps; 1 bp = 0.01 percentage points) relative to the ratings provided by individual private bond rating agencies. Samsung Securities, Shinhan Investment Securities, Kiwoom Securities, and NH Investment & Securities are serving as lead underwriters, and the scheduled issuance date is the 9th of next month.

The funds raised through this corporate bond issuance are expected to be used to repay existing corporate bonds. According to BondWeb, Woori Financial F&I has a corporate bond (Woori Financial F&I 4-2) worth 142 billion won maturing on the 11th of next month. That bond was issued in September 2024 with a coupon rate of 3.758% per annum.

Three domestic credit rating agencies—Korea Ratings, Korea Credit Rating Agency, and NICE Credit Rating—have assigned Woori Financial F&I a credit rating of “A0” with a “Stable” outlook. An “A” rating indicates that the issuer’s overall debt repayment capacity is sound, but there is a possibility that this capacity could deteriorate depending on future environmental changes.

Profitability Declines Due to Asset Restructuring… NPL Investment Expected to Expand

According to Korea Corporate Rating, Woori Financial F&I posted a net loss of 3.7 billion won in the first quarter of this year. This was due to a decline in interest income resulting from ongoing asset rebalancing, coupled with an increase in provision expenses.

Last year’s net income also fell significantly to 3.6 billion won from 13.3 billion won the previous year. Although interest expenses decreased, the decline in interest income due to asset rebalancing and increased losses from the sale of non-performing loans weighed on performance.

At the end of last year, the leverage ratio stood at 3.7x, remaining at the same level as at the end of the previous year (3.7x). The leverage ratio for an NPL investment firm—calculated by dividing total assets by equity—is a key financial soundness indicator that shows the extent to which assets have been expanded through external borrowing. Generally, the industry recommends maintaining a leverage ratio below 5x as an appropriate management benchmark.

Korea Ratings expects Woori Financial F&I’s market position to recover somewhat this year as restrictions on NPL purchases are eased. This is because NPL investments, which had been limited due to Woori Financial Group’s risk-weighted asset management, may expand. While an increase in investment scale could expand assets under management and the revenue base, the leverage ratio is also likely to rise accordingly.

Park Kwang-sik, a senior researcher at Korea Ratings, stated, “In 2026, as restrictions on the scale of NPL purchases are eased, the company’s market position is expected to improve somewhat compared to the previous year.” He added, “While the likelihood of short-term profitability improvement due to asset rebalancing is low, the leverage ratio is projected to rise as NPL purchases expand.”

He added, “If the pace of securitized bond recoveries slows due to a real estate market downturn, this could negatively impact profitability and the leverage ratio,” noting, “We plan to monitor trends in the company’s market position, profitability, and leverage ratio going forward.”