[Edaily Marketin, Reporter KIM YEON-SEO ] PARADISE(034230), whose credit rating has been upgraded to “A+,” is set to issue its first public corporate bond offering since the rating upgrade. Amid continued earnings improvements in its casino and hotel divisions, analysts predict the company will maintain excellent financial stability despite large-scale investments.

According to the investment banking (IB) industry on the 31st, PARADISE plans to issue corporate bonds totaling 60 billion won this October. The issuance will consist of two tranches—2-year and 3-year—each raising 30 billion won. Depending on the results of the bookbuilding process, the company plans to increase the issuance amount to a maximum of 100 billion won.

KB Securities, NH INVESTMENT & SECURITIES, Korea Investment & Securities, and Shinhan Investment & Securities are serving as lead underwriters. The target yield spread has been set at -30 basis points (bps; 1 bp = 0.01 percentage point) to +30 bps relative to the rating yields determined by independent private bond rating agencies.

Korea Ratings Corporation and NICEHoldings have assigned PARADISE a credit rating of “A+” with a “Stable” outlook. Previously, in April, Korea Ratings Corporation upgraded PARADISE’s credit rating from “A0” to “A+.” The agency determined that the company’s earnings would continue to improve, driven by growing demand from casino customers, and that it would maintain its revenue growth momentum through hotel acquisitions and the construction of new hotels.

PARADISE’s revenue last year reached 1.1499 trillion won, a 7.3% increase from the previous year. Revenue from the Incheon Paradise City integrated resort reached 597.5 billion won, a 10.8% increase from the previous year (539.3 billion won), driving overall revenue growth. Revenue in the hotel segment also increased due to robust occupancy rates and rising average room rates. The EBITDA margin stood at 20.1%.

The expansion of the hotel business is also expected to contribute to revenue growth. In January, PARADISE acquired 501 rooms at the Grand Hyatt Incheon West Tower from Carl Hotel Network, and the property opened in March as the “Hyatt Regency Incheon Paradise City.”

Lee Ju-won, a senior researcher at Korea Ratings’ Corporate Division 2, said, “With this acquisition, the number of rooms at PARADISE City has expanded from 769 to 1,270, and we expect revenue in the hotel segment to increase as a result of this expanded room supply.”

Its financial structure also remains strong. Last year, PARADISE generated annual operating cash flow of around 200 billion won. While equity increased by 16.8 billion won due to the conversion of convertible bonds into stock, net debt decreased by 61 billion won from the end of the previous year to 377.3 billion won. The debt-to-equity ratio and debt dependency ratio stood at 84.4% and 29.5%, respectively.

However, an increase in short-term borrowing burdens due to large-scale investments is expected to be unavoidable. Following the completion of the acquisition of the Grand Hyatt Incheon West Tower for approximately 210 billion won in January of this year, the company plans to invest about 575 billion won—including construction costs—in the development of the Jangchung-dong hotel by 2028.

The analyst stated, “Based on stable operating cash flow and proactive funding plans, such as the pre-sale of memberships for the Jangchung-dong hotel, the company should be able to meet its investment-related funding needs,” adding, “We expect it to maintain its current level of financial stability over the medium to long term.”