이 기사는 2020년 01월 17일 08:00 thebell 에 표출된 기사입니다.

South Korea’s largest steelmaker POSCO is off to a strong start in 2020 with its Korean Paper issuance. Its latest global bond sale was oversubscribed more than fourfold, witnessing strong investment demand for Korean Paper.

POSCO announced its sale of global bonds (144a/RegS) in Asian markets and ran pricing process on January 13. Korean Papers refer to foreign currency-denominated securities issued by South Korean entities in overseas markets.

It is the first time that the steel giant attracts investors for dollar- and euro-denominated debt offerings. The bonds are split into dollar-denominated three-year and five-year tranches and euro-denominated four-year tranche.

The bond sale was oversubscribed by more than four times the issue amount, receiving orders from Asia, Europe and the U.S. Dollar-denominated bonds received 4.4 billion dollars in orders and euro-denominated bonds received more than 2.6 billion euros in orders. POSCO has decided to sell three-year bonds worth 500 million dollars, five-year bonds worth 440 million dollars and four-year bonds worth 500 million euros.

POSCO has lowered a yield almost 30 basis points lower than initial price guidance (IPG). The steelmaker issued the three- and five-year bond with yields of 82.5 basis points and 97.5 basis points over the respective U.S. Treasury yield. Euro-denominated four-year bonds were sold with a yield of 80 basis points plus euro midswap.

This was the steel giant’s first euro-denominated bond offerings. POSCO tapped the European bond market due to the market conditions and the positive ESG (environment, social, and corporate governance) investment trend there. In the meantime, Europe’s defensive stance on Korean private companies has somewhat eased after LG Chemical’s sale of dollar- and euro-denominated bonds last year.

POSCO has also become the first euro-denominated sustainability bond issuer in Korean Paper market. Sustainability bond is a type of ESG bond, which is aimed to finance corporate activities in environmental, social responsibility and governance improvement.

Investing in ESG bonds is gaining popularity in Europe, while in Korean Paper market, only Korea Housing Finance Corporation, and Korea Development Bank and Shinhan Bank have issued euro-denominated social bonds and green bonds, respectively. Last year, POSCO sold dollar-denominated sustainability bonds.

POSCO has been accelerating bond sales since the fourth quarter of 2019. The steelmaker raised one trillion won by selling won-denominated bonds in October of 2019 and raised 500 million dollars via global bond sale in November. Including the latest bond sale, the steelmaker has raised more than three trillion won in the three month period from October of 2019 to January of 2020.

Industry watchers say POSCO has sold bonds to repay debts that will mature until 2021. The steelmaker used the proceeds from won-denominated bond sale in October of 2019 to repay debts maturing in October of this year.

(By reporter Pi Hye-rim)