Lump-sum money is flocking to domestic food and beverage companies' bond issuances. The market is judging that even if domestic demand is frozen, opportunities are opening overseas and company revenue will come through without difficulty.
According to the capital market on the 24th, food and beverage companies issuing bonds are attracting funds far exceeding their original targets. A prime example is Binggrae, the maker of the ice cream "Melona." On 18th, 640 billion won poured into the book building for Binggrae's corporate bond issuance. More than 10 times the original target issuance amount of 50 billion won flowed in.
LOTTE Chilsung Beverage, which conducted demand forecasting for a bond issuance on 16th, is a similar case. It planned to issue 100 billion won in three-year bonds and 50 billion won in five-year bonds, but a total of 1.33 trillion won poured in. A LOTTE Chilsung Beverage official said, "More funds came in than expected, so we increased the issuance to 180 billion won for the three-year bonds and 70 billion won for the five-year bonds, for a total of 250 billion won." The situation in Feb. was similar. LOTTE Chilsung Beverage at the time planned to issue 100 billion won in public bonds, but 970 billion won poured in, and it doubled the issuance from the original target.
Dongwon F&B, which issued bonds in Aug., drew more than 12 times the planned amount. Dongwon F&B initially planned to issue 60 billion won in bonds, but as funds poured in, it increased the total issuance to 120 billion won. In Apr. this year, CJ CheilJedang also drew 1.31 trillion won in demand forecasting for a 300 billion won corporate bond issuance, and Daesang attracted 1.35 trillion won for a 170 billion won corporate bond offering in Jan. this year.
The reason funds are flocking to food and beverage companies' bond issuances is that, even if the mood in the domestic market is poor, the market expects greater momentum in overseas markets. Expectations that price hikes can defend profitability were also reflected.
A bond analyst at a securities firm said, "No matter how tough the domestic market is, the market dominance of the flagship products offered by the food and beverage companies that issued bonds this year is solid," adding, "Bonds are different from stocks; investors inevitably place more weight on safety than on growth, so food and beverage companies' bonds are attractive as an investment target."
A Dongwon F&B official said, "We succeeded in raising large-scale funds thanks to strong performance in our core businesses and the stability of our business portfolio," adding, "It is meaningful in that it laid the groundwork for expanding our global business."