[Edaily Marketin KIM YEON-SEO Reporter] LOTTE REIT (AA-) secured orders exceeding its target amount during the bookbuilding process for its secured corporate bonds. However, for both the 1-year and 2-year issues, the bonds were fully subscribed at double-digit spreads—more than 30 basis points (1 bp = 0.01 percentage point) above the average yield for bonds with the same credit rating.

According to the investment banking (IB) industry on the 8th, LOTTE REIT received a total of 155 billion won in orders during its bookbuilding process for institutional investors aimed at issuing 125 billion won in secured corporate bonds.

By tranche (maturity), orders totaling 80 billion won were received for the 1-year tranche (with a target of 50 billion won), and 75 billion won in orders were received for the 2-year tranche (with a target of 75 billion won). While demand for the 1-year tranche exceeded the target amount, orders for the 2-year tranche matched the target amount exactly.

LOTTE REIT proposed a target interest rate band for the public offering of -40 to +40 basis points relative to the average market rate for AA- rated bonds across all maturities. Based on the bookbuilding results, the 1-year tranche was fully subscribed at a rate 37 basis points above the average market rate for its rating, while the 2-year tranche was fully subscribed at a rate 36 basis points above. The issuance rates for both maturities are expected to be set near the upper end of the target interest rate band.

These corporate bonds are secured bonds backed by the Lotte Premium Outlet in Icheon. LOTTE REIT plans to issue the bonds at the originally planned size of 125 billion won without increasing the offering amount.

The lead underwriters are NH INVESTMENT & SECURITIES, KB Securities, Korea Investment & Securities, SamsungSecurities, Hana Securities, and KIWOOM Securities. The scheduled issuance date is the 16th.