POSCO will be the first to issue corporate bonds next year. The bond issuance is expected to proceed smoothly, as POSCO has a high credit rating and the liquidity in the corporate bond market is expected to be abundant due to the early-year effect.
According to the investment banking (IB) industry on the 18th, POSCO is preparing to issue a total of 500 billion won in corporate bonds. It plans to issue them in segments of 2 to 10 years.
POSCO plans to conduct demand forecasting on the 6th of next month and issue the bonds on the 14th. Depending on the demand forecast results, the company is also considering increasing the issuance to a maximum of 1 trillion won.
The lead underwriters are NH Investment & Securities, KB Securities, Korea Investment & Securities, Kiwoom Securities, Mirae Asset Securities, and Samsung Securities. POSCO proposed an interest rate of -30 to +30 basis points (1 basis point = 0.01 percentage point) compared to individual market rates.
POSCO's credit rating is at the AA+ level, which is the highest rating typically assigned to private companies. Additionally, January is a time when institutions are actively deploying capital, leading to abundant liquidity in the corporate bond market due to the early-year effect.
Meanwhile, POSCO is the largest integrated steel company in South Korea and the seventh largest in the world, established in April 1968. By the end of 2023, its annual crude steel production capacity reached 40.68 million tons. The Eiffel Tower in Paris, France, is made of approximately 7,300 tons of steel, meaning POSCO's annual production could create about 5,570 Eiffel Towers.