[Edaily Marketin Reporter KIM YEON-SEO ] In the corporate bond market during the last week of October, KCC Corporation(002380)and SK RENT A CAR(068400)will conduct book-building for institutional investors. With institutional investors preparing to close their books at year-end, corporate bond issuance is gradually slowing down.

According to investment banking (IB) industry sources on the 25th, KCC Corporation (AA-) and SK Rent-a-Car (A0) will conduct book-building among institutional investors this week (October 26–30) to issue corporate bonds.

First, KCC Corporation will begin a book-building process on the 27th for the issuance of corporate bonds totaling 200 billion won. The bonds will consist of 2-year and 3-year maturities, and the company plans to increase the issuance amount to a maximum of 400 billion won depending on the results of the book-building.

The target yield band has been set at -30 basis points (bps; 1 bp = 0.01 percentage point) to +30 bps relative to the average yield of individual private bond rating agencies. NH INVESTMENT & SECURITIES, KB Securities, KIWOOM Securities, SamsungSecurities, Shinhan Investment & Securities, and Korea Investment & Securities are serving as lead underwriters. The scheduled issuance date is the 4th of next month.

Korea Ratings Corporation, NICEHoldings Credit Rating, and Korea Corporate Rating have assigned KCC Corporation a credit rating of “AA-” with a “stable” outlook.

Korea Ratings assessed that KCC Corporation has secured an excellent market position and business competitiveness based on its diversified business portfolio. In the first half of this year, on a consolidated basis, revenue breakdown was as follows: silicone 49.5%, coatings 29.8%, building materials 14.4%, and others 6.3%. The agency cited as strengths the company’s top-tier market positions in each business segment, as well as its secure relationships with major long-term clients such as HD HYUNDAI HEAVY INDUSTRIES and HyundaiMotor.

However, analysts noted that future trends in the silicon market and changes in demand from key Chonbang industries warrant close monitoring. Yang Da-eun, an analyst at Hanshin Rating, stated, “We identify the silicon market conditions driven by the global economy and supply-demand dynamics, changes in demand from the automotive, shipbuilding, and construction sectors, and trends in raw material prices as key factors to monitor,” adding, “Whether the company can maintain strong financial flexibility based on its holdings of listed stocks will also be crucial.”

SK Rent-a-Car will conduct a bookbuilding process on the 28th to issue corporate bonds totaling 100 billion won. The issuance is structured as 40 billion won in 2-year bonds and 60 billion won in 3-year bonds. Depending on the results of the bookbuilding, the issuance amount may be increased to a maximum of 200 billion won.

The target interest rate band has been set at -30 basis points to +30 basis points relative to the individual market average rate. KB Securities is the lead underwriter, and the scheduled issuance date is the 5th of next month.

The three credit rating agencies have assigned SK Rent-a-Car a credit rating of “A0” with a “Stable” outlook.

NICE Ratings assessed that SK Rent-a-Car has secured an excellent market position based on its extensive sales network and high brand recognition. Since its integration with the car rental division of SKNetworksCo.,Ltd, its market position has strengthened, and it maintains a 14.6% market share, ranking second in the industry.

However, the burden of ongoing investment to secure rental assets and higher financing costs compared to the past were cited as concerns. Kim Da-som, a senior researcher at NARR, analyzed, “While we assess the company’s business stability as excellent, thanks to the expansion of its customer base and diversification of its business portfolio, it is necessary to monitor the financial burden resulting from recent dividends and increased leverage.”