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Lotte Corp's corporate bond issue raises staggering $665 mn in demand

By Aug 26, 2020 (Gmt+09:00)

South Korean conglomerate Lotte Corporation saw overwhelming demand of 790 billion won ($665 million) from institutional investors on the issuing of corporate bonds during its August 26 bookbuilding, according to the investment banking industry.

Demand was about 5.3 times higher than the planned offering of 150 billion won; 480 billion won for three-year, 240 billion won for five-year, and 70 billion won for 10-year corporate bonds.

Initially, Lotte Corporation had intended to raise 50 billion won each for the three-year, five-year, and 10-year bonds. The company planned to issue 50 billion won worth of 10-year bonds as either green or sustainability bonds in a move to become the first Korean holding company to issue an environmental, social, and governance (ESG) bond.

Despite Lotte Corporation's affiliates such as Lotte Shopping Co. and Lotte Chemical Corporation posting poor earnings of late, strong demand from institutional investors may ride on solid earnings from subsidiaries such as Lotte Confectionary Co., upholding expectations that the company will maintain its strong AA credit rating.

The proceeds will be used to repay commercial paper worth 100 billion won and to construct an eco-friendly building at the Osan Campus of Lotte Group’s training center in Gyeonggi Province.

Lotte Corporation's borrowings based on a separate financial statement stand at 1.71 trillion won as of the end of June, with it investment assets among subsidiaries and affiliates reaching almost 7.39 trillion won. Earlier this year, the group posted an operating profit of 223.9 billion won through dividends from the first half of the year.

Write to Tae-ho Lee at

Danbee Lee edited this article

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