KT succeeded at its bond sale after attracting more than 1 trillion won in demand during book-building.
According to the investment banking (IB) industry on the 19th, KT secured a total of 1.13 trillion won in purchase orders in a bond book-building conducted with a target of raising 120 billion won that day. By maturity, 420 billion won flowed into the 3-year tranche aimed at 50 billion won, 200 billion won into the 5-year aimed at 20 billion won, 260 billion won into the 10-year aimed at 20 billion won, and 250 billion won into the 20-year aimed at 30 billion won.
This 20-year corporate bond is the first this year among general companies, excluding public corporations and banks. By issuing a long-dated tranche, KT diversified its maturity profile and highlighted its stable "super-high-grade bond" image to boost investor appeal.
The indicative yield band was presented at plus or minus 30 basis points (1 bp = 0.01 percentage point) over each maturity's individual market average yield, and, based on the book-building results, the final spread was formed at -6 bp for the 3-year, -8 bp for the 5-year, -16 bp for the 10-year, and -33 bp for the 20-year.
Earlier, Korea Ratings, NICE Investors Service, and Korea Investors Service rated KT at "AAA (stable)." On the back of strong demand, KT is reviewing increasing the issuance size to as much as 200 billion won. All of the funds raised are slated to be used to repay existing corporate bonds.
Meanwhile, SK On, which held a bond book-building the same day, received 144 billion won in orders for a 100 billion won offering. The 2-year tranche was filled at +39 bp over the market average yield and the 3-year at +40 bp, allowing the company to raise funds at interest rates in the 4% range.