Lotte Construction said on the 11th that it developed in-house a new securitized financial product using construction payment receivables from business sites nearing completion, issued the bonds, and raised 300 billion won.
Of the 300 billion won in asset-backed securities, 150 billion won has a maturity of one year, and the remaining 150 billion won has a maturity of one year and three months. Hana Securities and Shinyoung Securities served as joint lead managers, and Samsung Securities and NH Investment & Securities participated as underwriters.
The asset-backed securities (ABS) are backed by the stable cash flows of multiple business sites where unit sales are complete. With a 150 billion won credit facility from Hana Bank and the management of Lotte Construction's deposits, they were issued at the top AAA rating. The issued bond rating is higher than Lotte Construction's standalone credit rating (A0), enabling fundraising at a lower expense than existing borrowing rates. Based on this ABS issuance, Lotte Construction plans to diversify its funding sources by issuing additional ABS with similar structures if needed.
A Lotte Construction official said, "The successful issuance of AAA-rated ABS is an important turning point that shows the market recognizes the company's creditworthiness," and added, "Through thorough cash-flow management and improvements to our financial structure, we will deliver a full-fledged turnaround in business performance this year."