SK hynix has successfully issued a US$1.5 billion dollar-denominated bond.
According to foreign reports on Jan. 9, SK hynix conducted demand forecasts for dollar bonds in Asia, Europe, and the United States the previous day and confirmed the issuance of a US$1.5 billion bond. The issued dollar bonds consist of 3-year and 5-year fixed-rate debts (FXD), with values of US$500 million and US$1 billion, respectively.
The interest rates for the 3-year and 5-year bonds were set at levels higher than the equivalent maturity U.S. Treasury yields by 145 basis points and 167 basis points, respectively. Consequently, both the 3-year and 5-year bonds have the same par interest rate of 5.50%, with yields of 5.539% and 5.605%, respectively.
The initially proposed interest rates for the 3-year and 5-year bonds were 180 basis points and 200 basis points, respectively. However, during the demand forecasting process, orders totaling US$2.8 billion for the 3-year bond and US$3.7 billion for the 5-year bond were received, leading to a reduction in spread.
The successful issuance of dollar bonds by SK hynix was possible due to the recovery in prices of DRAM and NAND flash, which had previously been under pressure due to oversupply. The positive momentum in prices, coupled with the market’s elevated expectations for SK hynix, which heavily relies on these products, contributed to the successful bond issuance.
With the successful performance of SK hynix’s dollar bonds, SK on is also planning to secure payment guarantees from KB Kookmin Bank and proceed with the issuance of foreign currency bonds. SK on had received payment guarantees from KB Kookmin Bank in the process of issuing bonds worth US$900 million in May of last year.