Hanil Cement said on the 2nd that it decided to increase its public offering of corporate bonds to a total of 97 billion won after strong demand for the 60 billion won issuance conducted for the first time in three years.
In the book-building held on the 31st, Hanil Cement drew 83 billion won of demand for the 2-year notes (60 billion won sought) and 93 billion won for the 3-year notes (60 billion won sought), totaling 176 billion won.
The overall competition rate was 2.93 to 1. Based on its strong "A+ (stable)" credit rating, Hanil Cement filled the order book at around -5 basis points (bp) versus the rating-based market average for the 2-year notes and -20 bp for the 3-year notes. A Hanil Cement official said the company was also able to achieve an "under issuance," raising funds at rates below prevailing market levels.
Hanil Cement cited stable financial metrics and a solid business portfolio as drivers of the offering's success. Hanil Cement maintains sound indicators, with a liability ratio of 62.4% and a borrowing fund dependence of 26.3%. Analysts also noted that its vertically integrated structure—from ready-mixed concrete used in the early phase of construction to Remital (dry mortar) used in the later phase—helped minimize declines in profitability, which was one of the factors behind institutional investors' choice.
Hanil Cement plans to use the 97 billion won secured this time to refinance existing public offering bonds and repay bank borrowing fund. With high interest rates persisting, the strategy is to raise funds at lower rates to reduce interest expense and maximize management efficiency.
A Hanil Cement official said, "This achievement is meaningful given the challenging internal and external conditions, including geopolitical instability and a slump in the construction market," adding, "We will continue to maintain a stable financial structure and enhance shareholder value."