Korean Air Lines (credit rating A0) succeeded in its book-building for a corporate bond sale, drawing more than twice the amount sought. On the same day, NH Investment & Securities (AA+) also secured more than 2 trillion won, about 11 times the offering size, indicating strong institutional buying for high-grade and quasi-high-grade bonds in the debt market.
On the 8th, according to the investment banking (IB) industry, Korean Air Lines confirmed 463 billion won in bids in book-building conducted ahead of issuing 200 billion won in unsecured bonds.
By maturity, 238 billion won flowed into the 2-year tranche that sought 80 billion won, and 225 billion won into the 3-year tranche that sought 120 billion won. Pricing conditions were favorable. Korean Air Lines set a target spread band of ±30 bp (1 bp = 0.01 percentage point) versus the average yield from individual private bond evaluators (min-pyung). The 2-year filled at 9 bp below min-pyung, and the 3-year at 8 bp below.
Based on the book-building results, Korean Air Lines is considering upsizing the issue to as much as 350 billion won. Depending on the final upsizing, the spread may change slightly, and the funds raised will be used to repay existing debt.
Seven securities firms—NH Investment & Securities, Korea Investment & Securities Co., KB Securities, Kiwoom Securities, Mirae Asset Securities, Samsung Securities, and Hanwha Investment & Securities—served as joint lead managers.
NH Investment & Securities (AA+), which held book-building the same day, also drew 2.19 trillion won for a 200 billion won offering.
By tranche, 670 billion won came into the 2-year (seeking 50 billion won), 1.18 trillion won into the 3-year (seeking 120 billion won), and 340 billion won into the 5-year (seeking 30 billion won). The spread versus min-pyung was set at -6 bp for the 2- and 3-year tranches and -3 bp for the 5-year.
NH Investment & Securities is also considering upsizing the issue to as much as 300 billion won. The funds secured this time will be used to repay electronic short-term bonds and commercial paper (CP) maturing in September.