[E-Daily Marketin Reporter LEE GEON-EOM ] KoreanAirLines(003490)The company successfully secured the target amount of funds through a corporate bond bookbuilding process, attracting demand that far exceeded its target. It also achieved a negative (-) spread, demonstrating a favorable funding environment and posting solid results.

According to the financial investment industry on the 8th, KoreanAirLines received a total of 463 billion won in orders during the bookbuilding process for its 200 billion won unsecured corporate bond offering held that day. By maturity, the 2-year tranche, which aimed to raise 80 billion won, attracted 238 billion won in orders, while the 3-year tranche, targeting 120 billion won, drew 225 billion won.

NH INVESTMENT & SECURITIES, MIRAE ASSET SECURITIES, KB Securities, Korea Investment & Securities, KIWOOM Securities, HANWHA INVESTMENT & SECURITIES, and SamsungSecurities served as lead underwriters for this corporate bond issuance, which is scheduled to be issued on the 16th with the possibility of increasing the offering size to up to 350 billion won.

With demand exceeding the target amount by more than double, interest rates were set at favorable levels. Based on the offering amount, the expected spread is estimated at minus (-) 9 basis points (1 bp = 0.01 percentage point) for the 2-year bond and minus (-) 8 basis points for the 3-year bond. Initially, KoreanAirLines had proposed a spread band of -30 to +30 basis points relative to the individual market average rate for both the 2-year and 3-year bonds.

Since the spread was set at a negative level, the burden of future financing costs has been significantly alleviated.

Market observers attribute the terms of KoreanAirLines’ book-building to the positive impact of its solid fundamentals and stable resilience as South Korea’s first and largest air carrier.

A financial investment industry official commented, “KoreanAirLines demonstrates excellent business stability based on its high brand recognition and the competitiveness of its fleet and routes,” adding, “In particular, the fact that it has maintained sound financial flexibility—based on a financial structure that has improved significantly compared to pre-pandemic levels even after the integration of Asiana Airlines—led investors to place stable bets on the lower end of the band.”

The official added, “Although macroeconomic uncertainties persist, the outlook that the company will achieve solid performance over the medium to long term, based on its excellent ability to respond to market conditions, was also a key factor in the offering’s smooth success despite negative interest rates.”