CJ CheilJedang raises 600 billion won in the public bond market. With the delayed sale of its bio division, this is interpreted as a way to secure cash through bond issuance. In addition to CJ CheilJedang, many corporations continue to issue bonds for refinancing.
According to investment banking (IB) industry sources on the 6th, LX Hausys (A+), CJ CheilJedang (AA), Kiwoom Securities (AA-), Samchuly (AA+), POSCO International (A+), Pyeongtaek Energy & Power (A), LX International (AA-), SK Networks (AA-), SeAH Steel (A+), LOTTE REIT (AA-collateralized bonds), and others are preparing to forecast demand targeting institutional investors ahead of their public bond issuance this week (April 7-11).
CJ CheilJedang returned to the public bond market for the first time in one year and three months since January of last year. CJ CheilJedang plans to issue bonds worth a total of 300 billion won, including 200 billion won in three-year bonds and 100 billion won in five-year bonds. Depending on the demand forecast results, the issuance could increase to a maximum of 600 billion won.
The desired public interest rate has been presented at a level of -30 basis points to +30 basis points compared to the evaluation rate of individual private bond evaluators. The lead managers are NH Investment & Securities, KB Securities, Korea Investment & Securities, Shinhan Investment Corp., and Kiwoom Securities.
The funds being raised are expected to be used for debt repayment. CJ CheilJedang faces the maturity of a public bond worth 125 billion won in October. Additionally, the remaining maturity of commercial paper (CP) amounts to 670 billion won, making cash acquisition urgent.
Since November last year, CJ CheilJedang has been actively pursuing the sale of its green bio business, which accounts for about 90% of its bio revenue. MBK Partners, a domestic private equity fund (PEF) operator, has been cited as a potential buyer, but there are predictions that it may find it difficult to participate in the acquisition process due to the fallout from Homeplus's restructuring application.
The delay in the sale of the green bio business has led to an increase in CP issuance to secure cash. CJ CheilJedang has raised a total of 2.93 trillion won in CP from January 1 to April 4 this year.
LX Hausys and LX International, both subsidiaries of LX Group, will also proceed with bond issuance.
LX Hausys plans to issue bonds worth a total of 1 billion won, consisting of 500 million won in two-year bonds and 500 million won in three-year bonds. LX International is expected to raise a total of 1.5 billion won with a combination of two-year and three-year bonds. Depending on the demand forecast results, LX Hausys has also opened up to increase its issuance limit to 1.5 billion won, while LX International could go up to 3 billion won.
LX Hausys plans to forecast demand on the 7th and issue bonds on the 14th. LX International is set for demand forecasting on the 9th and issuance on the 16th. Both companies have presented a level of desire for public interest rates that adds -30 basis points to +30 basis points compared to the private bond evaluation rates.
Kiwoom Securities is procuring securities following Yuanta Securities Korea last week. It has planned to issue a total of 1.5 billion won, including 1 billion won in three-year bonds and 500 million won in five-year bonds. Depending on the demand forecast results, the total issuance could increase to a maximum of 3 billion won.
The desired public interest rate has been presented at a level that adds -30 basis points to +30 basis points compared to the individual private bond evaluation rate. Kiwoom Securities aims to forecast demand on the 8th and issue on the 15th.