SK Ecoplant, Raises 400 Billion Won in Corporate Bonds in Three Months

SK Ecoplant is tightening its grip on financing by issuing corporate bonds worth a total of 400 billion won in just three months.

According to the financial investment industry on the 29th, SK Ecoplant issued 100 billion won worth of private bonds on the 27th to secure refinancing funds. The bonds have a two-year maturity with a coupon rate of around 4.0% per annum. The company had previously issued a total of 300 billion won worth of 1- and 2-year corporate bonds in the public bond market in February. The coupon rate was set at around 4.0% to 4.6% per annum.

The reason SK Ecoplant has embarked on large-scale financing within three months is that the amount of corporate bonds maturing in the second half alone amounts to 432 billion won. Considering that the previous corporate bond coupon rates were mostly around 5% to 6% per annum, the company has succeeded in reducing interest costs this year. It's not just corporate bonds. Short-term financing is also significant. SK Ecoplant's commercial paper (CP) issuance balance is 413 billion won, and the balance of electronic short-term bonds is 70 billion won, totaling 483.5 billion won. There are concerns about the short borrowing structure as all maturities are less than one year.

SK Ecoplant's credit rating is at the A- level with a 'stable' outlook. It is one notch above the BBB+ rating. The credit rating industry has evaluated that SK Ecoplant's rapidly increasing borrowings are a burden on its creditworthiness.

Kim Woong, a researcher at NICE Credit Rating, said, "SK Ecoplant's net borrowings are showing a rapid increase," adding, "The scale of borrowings is excessive compared to its profit-generating capacity." SK Ecoplant's net borrowings surged from 1.1317 trillion won at the end of 2020 to 5.1437 trillion won at the end of last September. The increase in project financing (PF) contingent liabilities is also a burden. Researcher Kim said, "Recently, the scale of credit support related to private development projects is increasing in the form of capital supplementation," adding, "In some sites where the obligation to complete construction is provided, the sales rate remains at an insufficient level, leading to uncertainties in the recovery of construction bonds and risks related to the injection of self-funds." khj91@fnnews.com Hyun-jung Kim