LG Chem officially announced on May 15 that it plans to issue 800 billion won (US$713.01 million) of corporate bonds. The figure far exceeds the initial amount of 500 billion won (US$445.63 million). Also, this is the highest amount after the bond demand forecast system was introduced.
The company will issue 120 billion won (US$106.95 million) of corporate bonds in three-year maturity, 400 billion won (US$356.51 million) in five-year maturity and 280 billion won (US$249.55 million) in seven-year maturity.
LG Chem said orders of 1.77 trillion won (US$1.58 billion) have been placed on corporate bonds after inquiring with institutional investors for bond demand worth 500 billion won (US$446.43 million) on the 12th. With such a successful demand forecast, the company has decided to increase the amount of corporate bonds to be issued.
In addition, LG Chem will be able to issue corporate bonds with a lower interest rate due to high demand of investors. Accordingly, the company can cut down financial costs and secure liquidity in advance. The interest rate will be 0.02 to 0.05 percent lower than the average rate assessed by private bond rating agencies and the fixed interest rate will be finalized on May 18.
LG Chem is planning to inject funds to be secured by the issuance of corporate bonds in expanding production facilities at home and abroad to strengthen the base of future growth and paying back its short-term debts to stabilize the global financial structure.