이 기사는 2022년 04월 27일 07:40 thebell 에 표출된 기사입니다.

Korean Air Lines’ bookbuilding to issue a corporate bond has attracted strong bids from investors.

The airliner launched bookbuilding to issue a corporate bond worth 200 billion won ($159 million) on Monday. The company allocated 100 billion won each for two tranches of notes with 2-year and 3-year maturities. Shinhan Financial Investment, Korea Investment & Securities, Kiwoom Securities, KB Securities, NH Investment & Securities and IBK Investment & Securities are joint bookrunners.

The South Korean issuer’s two tranches of notes received orders worth 518 billion won in total - 322 billion won and 196 billion won, respectively. The size of the offering is likely to increase to up to 300 billion won.

Investor sentiment was solid as the company was assigned a stable outlook by three domestic credit rating agencies. Korea Ratings and Korea Investors Service assigned a stable outlook on the company in September 2021 and January 2022, respectively. NICE Investors Service recently upgraded the company’s outlook from negative to stable. Korean Air fully regained its BBB+ rating after it was placed on the watch list for possible downgrade in March 2020.

The country's airline industry is expected to show signs of recovery amid eased Covid-19 restrictions. Uncertainties have also been removed after the country's competition regulator gave conditional approval for Korean Air to purchase a 63.88% stake in Asiana Airlines.

Korean Air recorded revenue of 9 trillion won in 2021, down from 12.38 trillion won in 2019, which was before the pandemic. Yet, its operating profit significantly increased from 176.1 billion won to 1.42 trillion won in the same period thanks to its cargo business.

Asset managers and securities firms creating high-yield funds also flocked to the offering amid a series of mega initial public offering (IPO) deals in the pipeline this year. A high-yield fund that invests 60% of its assets in bonds with a rating below BBB is eligible to receive 5% of IPO shares in advance.

The 2-year and 3-year notes were priced at 50 bps and 41 bps below the average yields calculated by four major local credit rating agencies. Final prices were lower than pricing guidance which ranged from minus 20bps to plus 20bps of the average yield for the bonds.

According to registration statement, Korean Air’s average yields calculated by four credit rating agencies were 4.658% for the 2-year and 5.084% for the 3-year. If the yields stay the same until the issuance date on May 2, the notes are expected to be priced at 4.158% and 4.674%, respectively. (Reporting by Joon-woo Nam)