Korea Zinc said on the 29th it successfully issued its 13th corporate bond worth 700 billion won. The initial target was 350 billion won, but 2.55 trillion won poured in during the book-building with institutional investors, leading to an upsized issue.
The bonds consist of a 3-year tranche (13-1) of 350 billion won and a 5-year tranche (13-2) of 350 billion won. The coupon rates are 3.050% and 3.287%, respectively, which are -26bp and -20bp versus the individual market average. This is seen as the largest rate cut among corporations with the same credit rating (AA0).
All proceeds will be used to repay debt. Korea Zinc plans to repay 600 billion won in trade finance and 100 billion won in commercial paper to improve financial stability.
The strong investor interest is seen as reflecting Korea Zinc's stable earnings and expectations for its strategic minerals and Troika Drive new businesses.
In the first half of this year, Korea Zinc posted sales of 7.6582 trillion won and operating profit of 530 billion won, up 40.9% and 16.9%, respectively, from a year earlier.
It is also the only producer in Korea of strategic minerals such as antimony, indium, and bismuth, and is accelerating expansion of production of critical minerals such as germanium and gallium.
A Korea Zinc official said, "The successful bond issuance shows the market's confidence in new growth businesses such as strategic minerals and the "Troika Drive." We will further strengthen our financial structure with the funds secured."