KCC to issue another bond ahead of maturities in the KRW 1 trillion range next year; to raise up to KRW 400 billion [fnMarketWatch]

[The Financial News] KCC is returning to the public corporate bond market ahead of a maturity burden next year from marketable borrowings in the KRW 1 trillion range. With KRW 630 billion in corporate bonds coming due next year alone, along with refinancing needs for short-term borrowings such as commercial paper (CP), the move is seen as a proactive effort to secure funding. KCC plans to raise up to KRW 400 billion through this public bond offering.
According to investment banking (IB) industry sources on the 14th, KCC will hold a demand forecast for institutional investors at the end of this month for a KRW 200 billion bond issue. The bonds will have maturities of two and three years, and the issue size is expected to be increased to as much as KRW 400 billion depending on the results of the demand forecast. The bonds are scheduled to be issued on the 4th of next month.
The six joint lead managers are NH Investment & Securities, KB Securities, Kiwoom Securities, Samsung Securities Co., Ltd., Shinhan Investment & Securities, and Korea Investment & Securities Co., Ltd. KCC's corporate bond rating is AA- (stable).
KCC has about KRW 1.93 trillion in corporate bonds outstanding. Adding its KRW 710 billion in outstanding CP brings its marketable borrowings to about KRW 2.64 trillion. Of that amount, KRW 630 billion in corporate bonds will mature next year, accounting for about 32.6% of the total outstanding corporate bonds.
Specifically, KCC will face KRW 380 billion in corporate bond maturities on January 15 next year. This will be followed by maturities of KRW 30 billion on April 8 and KRW 220 billion on October 7. In particular, about 60% of the year's total corporate bond maturities are concentrated in January next year. The funding burden could grow further when maturities and refinancing needs for short-term borrowings such as CP are taken into account.
This issuance comes about three months after July 30. KCC issued KRW 400 billion in public bonds in February and again in July this year. In July's demand forecast, institutional investors placed orders totaling KRW 1.385 trillion for an offering of KRW 200 billion, prompting KCC to increase the issue size to KRW 400 billion. If it succeeds in increasing the issue to the maximum again this time, its public bond issuance this year will total KRW 1.2 trillion.
KCC's repeated returns to the corporate bond market reflect the need to manage the maturity profile of its marketable borrowings. Replacing short-term borrowings with long-term corporate bonds can extend refinancing cycles and spread out repayment obligations that would otherwise be concentrated in a short period. 
The market is watching how much demand KCC will secure from institutional investors in this demand forecast. With large corporate bond maturities scheduled for next year, the outcome of this public bond offering is expected to be a key factor in the company's future refinancing strategy.
Meanwhile, KCC's largest shareholder is Chairman Chung Mong-jin, with a 20.0% stake, while related parties together hold a 34.35% stake on a common-share basis. 
[email protected] Kim Hyun-jung Reporter