Korean brokerage firms lend $208 mn on Australia coal terminal

Three South Korean brokerage firms, including Samsung Securities Co. Ltd., underwrote around 250 billion won ($208 million) of a subordinated debt on Abbot Point coal terminal in Australia in the second investment by South Korean institutions in the export terminal.

Samsung and Hanwha Investment & Securities Co. Ltd. acquired 150 billion won of the five-year debt in aggregate for an expected yield of about 8%. They are selling them down to domestic institutional investors.

Korea Investment & Securities Co. Ltd. underwrote the remaining 100 billion won in balance-sheet investment.

It was first reported by South Korean news outlet Newspim on Sept. 25 and was confirmed by a source with knowledge of the matter.

The debt financing came a year after Mirae Asset Daewoo Co. Ltd. underwrote A$330 million ($243 million) of a senior debt on the coal terminal in Queensland, in its first debt underwriting in whole for a large-size overseas infrastructure asset.

“Although subordinated debts have a lower level of stability compared to senior debts, the Australian coal terminal has secured stable, long-term contracts and (the subordinated debt) offers a generous margin,” Newspim quoted an unnamed source as saying.

The purpose of the new debt funding was not immediately known.

The three companies provided the financing through Mastern Investment Management Co. Ltd. and Korea Investment Management Co. Ltd.

India’s Adani Group purchased a 99-year lease on Abbot Point coal terminal from the Queensland government in 2011 and acquired the operations lease in 2016.

The terminal comprises rail in-loading facilities, coal handling and stockpiling areas as a coal export terminal.

By Hyun-il Lee

hiuneal@hankyung.com