This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:24 p.m. on Jun. 26, 2026.
Major domestic securities firms are launching preemptive sales efforts targeting LG Chem and EcoPro. As both companies are expected to have large mid- to long-term funding needs, they are moving to secure bookrunner roles before the transaction gets underway in earnest. Securities firms are said to be waging behind-the-scenes competition by proposing various funding structures tailored to each company's situation.
According to the investment banking (IB) industry on the 26th, major securities firms have recently been maintaining behind-the-scenes contact with LG Chem and EcoPro by delivering proposals containing funding plans. With coverage teams taking the lead in building relationships preemptively, some firms are said to have their IB division heads personally step in to compete for deal sourcing.
LG Chem is drawing the most attention. The burden of financing costs has grown compared with the past for large-scale refinancing and new funding through the corporate bond market after a recent credit rating downgrade. The prolonged slump in the petrochemical sector, combined with the dual task of investing in the advanced materials business and managing financial soundness, is also cited as a burden.
In the market, a price return swap (PRS) using LG Energy Solution equity held by LG Chem is being discussed as a strong funding option. At the end of last year, LG Chem secured funds through a large PRS transaction using LG Energy Solution equity. Most of the amounts taken on by the securities firms that participated in the transaction at the time have reportedly been absorbed by the market recently.
Given that the overhang burden has been largely resolved and corporate bond funding costs have risen, the view is that if LG Chem seeks additional funding, it is highly likely to pull out the PRS card again. As a result, competition among securities firms to secure the next LG Energy Solution PRS bookrunner slot is heating up.
EcoPro is also a key focus in the brokerage industry. That is because the put option exercise date for EcoPro BM convertible bonds (CB) held by financial investors (FI) is approaching on Jul. 24 next month. The CB, issued in 2023 at 440 billion won, had an initial conversion price of 275,000 won per share. After refixing, the current conversion price has been lowered to the minimum adjustment limit of 206,250 won.
However, based on the closing price that day, EcoPro BM shares were at 133,700 won, about 35% below the conversion price. From investors' standpoint, demanding redemption is more advantageous than converting to stock, raising the possibility that a sizable number of put options will be exercised. If investors exercise the put option on the entire 440 billion won, EcoPro BM would have to repay about 466.9 billion won, including principal and interest.
The market also notes the possibility of entering negotiations with investors to change terms, such as raising the maturity interest rate. However, if investors demand redemption, actual funding needs arise, so securities firms are moving preemptively by proposing various funding options, including issuing refinancing CBs, corporate bonds, and structured finance.
EcoPro BM's funding burden is directly tied to the financial strategy of its largest shareholder, EcoPro. The market sees the potential for additional group-level funding needs depending on the scale of CB put option exercises and whether refinancing takes place.
An IB industry source said, "For LG Chem, the PRS using LG Energy Solution equity is the focus, and for EcoPro, it is the demand for EcoPro BM CB repayment and refinancing," adding, "Major securities firms are entering the competition by proposing various structures even before the transaction is formalized."