이 기사는 2022년 04월 29일 08:04 thebell 에 표출된 기사입니다.

South Korea’s retail giant GS Retail has garnered strong investor demand in its bond sale.

The offering attracted 850 billion won ($668 million) in orders during bookbuilding on Tuesday, meaning the deal was almost four times oversubscribed, according to sources.

The South Korean issuer’s two tranches of notes with 3-year and 5-year maturities received orders worth 600 billion won and 250 billion won, respectively, compared to its original targets of 150 billion won and 50 billion won.

Asset managers, securities firms, insurance companies, banks and pension funds participated in the bookbuilding.

The 3-year note was priced 1bp over the average yield calculated by major local credit rating agencies and the 5-year note was priced on par with the average yield.

According to Korea Asset Pricing, GS Retail’s 3-year and 5-year notes had their average yields about 7bp below the average yields of bonds with the same credit rating and maturities as of Monday. Final prices are expected to be priced below the average yields.

The timing of bookbuilding was considered appropriate as the government bond yields have hovered around 3%.

“Emart and Hotel Shilla’s bookbuildings earlier this year saw positive demand,” an industry source said. “Investor sentiment may be becoming stable.”

The successful bookbuilding was also attributable to an upgrade in the company’s outlook. Local credit rating agency Korea Ratings upgraded GS Retail’s outlook to positive at the end of last year. NICE Investors Service and Korea Investors Service have maintained their stable outlook for the company.

GS Retail will issue the 5-year note in the form of ESG (environment, social and governance) bond. Its 5-year social bond received the highest possible S1 rating from Korea Ratings.

The proceeds from the bond sale, which will be completed on May 4, will be used to support small and medium-sized business partners and convenience store franchisees. Shinhan Financial Investment, Samsung Securities, Korea Investment & Securities, KB Securities and NH Investment & Securities are joint bookrunners. (Reporting by Ji-hye Lee)