Korean Air’s Bond Order Book Draws Strong Demand... NH Investment & Securities Also Secures More Than KRW 2 Trillion [fn Market Watch]

[Financial News] Korean Air (A0) successfully attracted strong demand in its bond offering. It drew more than twice the amount sought. NH Investment & Securities (AA+) also secured more than KRW 2 trillion, nearly 11 times its target.
According to investment banking industry sources on the 8th, orders totaling KRW 463 billion poured in during the demand forecast for Korean Air’s KRW 200 billion unsecured bond offering. By maturity, the two-year bonds, for which KRW 80 billion was sought, received KRW 238 billion in orders. The three-year bonds, with KRW 120 billion on offer, attracted KRW 225 billion.
Korean Air set an indicative pricing range of plus or minus 30 basis points against the average rate assessed by private bond appraisers (1 basis point = 0.01 percentage point). The two-year bonds filled the offering at 9 basis points below the average appraisal rate, while the three-year bonds did so at 8 basis points below it.
Based on the demand forecast, Korean Air is considering increasing the issuance to as much as KRW 350 billion. The spread may change somewhat depending on the final increase, and the proceeds will be used to repay existing debt. Seven securities firms—including NH Investment & Securities, Korea Investment & Securities, KB Securities, KIWOOM Securities, Mirae Asset Securities, Samsung Securities and Hanwha Investment & Securities—served as lead managers.
NH Investment & Securities, which also conducted its demand forecast on the same day, attracted KRW 2.19 trillion for an offering of KRW 200 billion. By tranche, the two-year bonds, with KRW 50 billion sought, received KRW 670 billion in orders. The three-year bonds, with KRW 120 billion sought, drew KRW 1.18 trillion, while the five-year bonds, with KRW 30 billion sought, attracted KRW 340 billion. The spreads were set at 6 basis points below the average appraisal rate for the two-year and three-year bonds, and 3 basis points below it for the five-year bonds.
NH Investment & Securities is also considering increasing the issuance to as much as KRW 300 billion. The funds secured will be used to repay electronic short-term bonds and commercial paper (CP) maturing in September.

[email protected] Kang Gu-gwi Reporter