[Market In] KCC Corporation’s Corporate Bond Bookbuilding Draws 1.4 Trillion, a ‘Huge Success’
Secured 1.38 trillion won in orders for a 200 billion won offering
Considering an Increase of Up to 400 Billion Won… Refinancing of Short-Term Bonds and Commercial Paper
[Edaily Marketin Reporter KIM YEON-SEO ] KCC Corporation(002380)(AA-) achieved a successful issuance by raising nearly seven times the target amount during its corporate bond bookbuilding. Both the 2-year and 3-year bonds were fully subscribed at yields below their respective market averages, securing strong demand from institutional investors.
A view of KCC Corporation’s headquarters. (Photo courtesy of KCC Corporation)
According to the investment banking (IB) industry on the 27th, KCC Corporation received a total of 1.38 trillion won in orders during its bookbuilding process for institutional investors aimed at issuing corporate bonds totaling 200 billion won. This amount is 6.9 times the target offering amount.
By tranche (maturity), 560 billion won in orders were received for the 2-year tranche (target size: 80 billion won), and 820 billion won for the 3-year tranche (target size: 120 billion won).
KCC Corporation set its target yield band at –30 basis points (1 bp = 0.01 percentage point) to +30 basis points relative to the individual market average yield across all maturities. Based on the book-building results, both the 2-year and 3-year bonds were fully subscribed at yields 9 basis points below the individual market average yield. This means demand was secured at yields below the individual market average for both maturities.
Based on the results of this bookbuilding, KCC Corporation plans to consider increasing the issuance amount by up to 400 billion won.
The company plans to use all funds raised from this corporate bond issuance to repay debt. The proceeds will be used to refinance short-term bonds and commercial paper (CP) maturing this November.
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