To Repay Maturing Debt
Korea East-West Power announced on May 4 that it has successfully issued five-year global bonds worth US$500 million.
The company issued the bonds at an interest rate that was 40bp (1bp = 0.01 percent) lower than the initial price guidance (IPG). The fixed rate at maturity is 1.750 percent. This is the lowest-ever interest rate among global bonds issued by Korean public institutions excluding financial institutions.
The bonds are the first U.S. dollar-denominated five-year fixed-rate public offering bond issued by a Korean public institution since the outbreak of the COVID-19 virus. Subscriptions amounted to US$3.85 billion, 7.7 times the size of issuance.
"We have successfully sold bonds without a new issuance premium (NIP), even though we have been absent in the Korean paper market for the past two years,” said an official of Korea East-West Power. “Compared with Korean won-denominated bonds, these bonds are issued in much more favorable terms, They will help us save 23.2 billion won in financial costs for five years.”
Korea East-West Power plans to use the funds to repay global bonds worth US$500 million that will mature on June 2.