POSCO to raise up to $691 million as next year’s 1st corporate bond issuer

South Korea’s steel-to-battery materials conglomerate POSCO Group plans to raise up to 1 trillion won ($691 million) in the country’s first corporate bond issue of 2025.

According to investment banking industry sources on Thursday, POSCO, the steelmaking unit of POSCO Holdings Inc., will conduct bookbuilding for corporate bonds worth 500 billion won on Jan. 6.

Sources said the issue could rise to 1 trillion won depending on demand.

The bonds will have varied maturities, including 2-year, 3-year, 5-year, and 7-year options.

Domestic credit rating agencies have assigned POSCO a credit rating of AA+, with a stable outlook.

The underwriters are NH Investment & Securities Co., KB Securities Co., Korea Investment & Securities Co., Samsung Securities Co., Mirae Asset Securities Co., and Kiwoom Securities Co.

RETURN TO CORPORATE DEBT MARKET

POSCO Group is regarded as a big issuer in the corporate debt market.

However, the conglomerate maintained a conservative approach to fundraising throughout the first half of this year.

Since POSCO E&C Co. issued 155 billion won in corporate bonds in March, group affiliates have refrained from tapping the domestic debt market.

Following Chairman Chang In-hwa's inauguration earlier this year, the group prioritized structural reforms and cost reductions over increased borrowing.

The group, however, shifted its stance toward aggressive fundraising in the second half of the year.

In July, POSCO Future M Co., a battery material and steel manufacturing equipment supplier, issued 600 billion won in corporate bonds to repay maturing debt and invest in its nickel-cobalt-aluminum cathode materials plant in Gwangyang, South Jeolla Province.

Recently, the company has also completed issuing hybrid bonds worth 600 billion won, seeking a competitive edge through proactive investments amid the electric vehicle market's temporary demand slowdown, known as the EV chasm.

POSCO International Corp., the group’s trade and energy subsidiary, issued 300 billion won in corporate bonds in September.

TO EXPAND INVESTMENT IN BATTERIES

Industry officials said the POSCO Group will likely take a more aggressive stance in liquidity management next year.

Industry officials said the group is expected to expand investments in its core steel business and secondary battery materials. Significant funding needs are also projected for new business areas, including robotics and artificial intelligence.

Chairman Chang pledged to foster the group’s EV battery materials business as its key next-generation growth engine.

Write to Hyun-Ju Jang at blacksea@hankyung.com

In-Soo Nam edited this article.