This article was displayed on the ChosunBiz MoneyMove (MM) website at 11:31 a.m. on Dec. 31, 2025.
The refixing clause on the convertible bonds (CB) issued by the ultra-precision mass spectrometer corporations ASTA was recently removed. The previous refixing clause lowered the conversion price of the CB when the share price fell, favoring investors, but the clause disappeared through an agreement. While refixing deletions have occurred before, in ASTA's case, the market is focused on the reasons behind it.
According to the Financial Supervisory Service electronic disclosure system, ASTA said on Dec. 24 that it deleted the refixing clause on the first CB through talks with investors. The CB was issued in Mar. 2025 in the amount of 3 billion won to Sangsangin Investment & Securities. After investing in the CB, Sangsangin Investment & Securities sold half each to its then-affiliates Sangsangin Savings Bank and Sangsangin Plus Savings Bank, and the two savings banks now hold the CB. Sangsangin Savings Bank has been set to be sold to KBI Group, but it remains under Sangsangin for now.
ASTA's CB set a conversion price of 5,165 won, similar to the issuance price, and included a refixing clause that allowed the conversion price to be lowered if the share price fell based on evaluations every five months. The refixed conversion price is limited to a floor of 70% of the initial conversion price at issuance.
ASTA's share price stayed in the 5,000-won range through July, then surged and is now in the 8,200-won range. Investors can exercise the conversion right on the CB after Mar. 10, 2026. If the current price holds until then, investors could expect a return of about 60%.
Still, even if the current share price looks solid, the outlook for small and mid-caps is not guaranteed. With the refixing removed without other consideration, attention is on why Sangsangin Savings Bank gave up a favorable clause on its own.
A person in the investment banking (IB) industry said, "From ASTA's standpoint, deleting the refixing clause offers big advantages such as improving the financial statements and easing overhang concerns, but there is no practical benefit for investors," and added, "With the share price already above the conversion price, it appears they gave up the refixing clause to cooperate with ASTA over the long term." Regarding the deletion of the refixing clause, neither Sangsangin Savings Bank nor ASTA commented.
However, regardless of whether a refixing exists, Sangsangin Savings Bank and Sangsangin Plus Savings Bank appear poised for high returns, according to IB industry sources. ASTA's CB guarantees a high interest yield. The coupon rate is 1% and the yield to maturity is 7%, and the 7% rate is high even compared with typical collateral lending rates. The CB also carries both a call option allowing the issuer to buy back the CB and a put option allowing investors to demand early redemption. If the call option is exercised, the annual interest yield jumps to 8%.
This CB is even secured by unusual collateral. At issuance, ASTA pledged about 1.7 billion won in lending receivables and real estate as collateral.
Of the 3 billion won raised through the CB, ASTA used 800 million won to repay a loan. Instead of refinancing funds borrowed last year from Sangsangin Savings Bank at 9.5% interest, it issued the CB via Sangsangin Investment & Securities, and Sangsangin Savings Bank and Sangsangin Plus Savings Bank bought it back.
For the two savings banks, even if the interest rate declined somewhat, the analysis is that they could expect higher interest revenue by effectively expanding lending through CB investments, which are less regulated than loans.
ASTA debuted on the KOSDAQ market in 2017 through a technology special listing but has posted operating losses every year since. As of 2024, annual sales were only 3.4 billion won. From the standpoint of regulated savings banks, its finances do not allow a large increase in lending.
Under current laws and regulations, loans are subject to prudential oversight by regulators. To ensure loan soundness, savings banks are regulated, including setting aside provisions for part of the loan amount based on repayment capacity and the possibility of default. Considering ASTA's financial condition, it would have been effectively difficult to increase the existing 800 million won loan to 3 billion won. In contrast, issued bonds including CBs are classified as financial assets under International Financial Reporting Standards and are not subject to such regulations.