Hanwha Aerospace Issues $500 Million Overseas Public Bond... First Global Funding by a Korean Defense Company

[Financial News] Hanwha Aerospace has successfully issued $500 million in overseas public bonds. It is the first time a Korean defense and aerospace company has raised funds in the overseas public bond market.
According to the industry on the 21st, Hanwha Aerospace completed a demand forecast for U.S. dollar-denominated bonds targeting investors in Europe and Asia, securing $500 million, or about 741 billion won, in funding. The bonds are fixed-rate notes with a three-year maturity.
Orders worth $3.3 billion came in, about seven times the issue size. The final yield was set at 83 basis points above the yield on U.S. Treasuries with the same maturity. That is 32 basis points lower than the initial price guidance of 115 basis points. After confirming investor demand, the company lowered the spread and reduced its funding costs.
The lead managers were Citigroup Global Markets Securities, Credit Agricole Securities, and UBS. Hanwha Aerospace plans to use the proceeds for working capital and debt repayment.
The issuance came after Hanwha Aerospace received an A- credit rating from global ratings agency Standard & Poor's last month. After becoming the first Korean defense and aerospace company to obtain a global credit rating, it has now also completed an overseas bond issuance, underscoring its credibility in global financial markets.
The overseas public bond issuance is also significant because it diversifies the company's funding sources. It adds an overseas investor base to a financing structure that had previously relied mainly on domestic corporate bonds and bank loans. If large-scale facility investment or overseas expansion creates future demand for dollar funding, the company will have more options for raising capital.
Defense and aerospace businesses require large upfront investments in R&D, production facilities, and long-term supply contracts. In particular, overseas defense projects involve long lead times from contract signing to delivery and follow-up logistics support, making financial stability and access to foreign currency funding key competitive factors.
Hanwha Aerospace is expanding its business areas to include ground weapon systems, aircraft engines, and space launch vehicles. With global defense demand continuing, the successful funding is expected to strengthen its financial foundation for expanding overseas projects.
A Hanwha Aerospace official said, "The successful completion of our first overseas public bond issuance reflects the strong assessment by overseas institutional investors of the company's growth potential and financial soundness." The official added, "Based on our stable funding capabilities, we will further strengthen our competitiveness in the global defense and aerospace markets."

[email protected] Kang Gu-gwi Reporter