[Edaily Marketin KIM YEON-SEO Reporter] PARADISE (A+) secured orders exceeding three times its target amount during a bookbuilding process with institutional investors for a public offering of corporate bonds. However, investor sentiment varied by maturity. While the 2-year bonds attracted nearly five times the offering amount, the 3-year bonds were fully subscribed at a double-digit spread over the benchmark rate. This is interpreted as investment demand concentrating on bonds with relatively shorter maturities amid the recent trend of rising market interest rates.

According to investment banking (IB) industry sources on the 6th, PARADISE received a total of 205 billion won in orders during the bookbuilding process conducted that day for the issuance of corporate bonds totaling 60 billion won. This amount is approximately 3.4 times the target amount.

By tranche (maturity), orders totaling 149 billion won were received for the 2-year tranche (30 billion won target), and 56 billion won for the 3-year tranche (30 billion won target). While demand overall exceeded the offering amount, a clear difference emerged in investor demand between the 2-year and 3-year tranches.

A disparity was also evident in the yield spreads. PARADISE set its target yield band at -30 to +30 basis points (1 bp = 0.01 percentage point) relative to the individual market average yield. According to the bookbuilding results, the 2-year tranche was fully subscribed at a yield 1 bp below the individual market average. In contrast, the 3-year tranche reached its target amount at a spread of +27 bp, recording a double-digit yield premium.

The fact that the 3-year bond recorded a higher spread relative to the market average is interpreted as a result of investors’ growing preference for short-term instruments amid the recent sustained rise in market interest rates. Analysts suggest that, in an environment of heightened interest rate volatility, the longer the maturity, the greater the price burden resulting from rising rates; consequently, demand concentrated on the 2-year bond, which has a relatively shorter duration.

PARADISE plans to use the funds raised through this corporate bond issuance to repay debt. The lead underwriters were Shinhan Investment & Securities, Korea Investment & Securities, KB Securities, and NH INVESTMENT & SECURITIES.