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Bond issues

LG Chem to issue over $1 bn in bonds; largest amount ever

By Feb 15, 2021 (Gmt+09:00)

LG Chem to issue over /> bn in bonds; largest amount ever 

South Korea-based LG Chem Ltd. is set to issue 1.2 trillion won ($1.1 billion) worth of bonds this week, making it the largest won-denominated bond issue from a privately-held company in Korea.

LG Chem will issue corporate bonds on Feb. 19, according to the company's regulatory filing on Feb. 15. The bond sale amount beats the previous record held by SK Hynix Inc., which issued 1.06 trillion won worth of bonds in February last year.

The company has decided to double the bond issue amount from the initial 600 billion won after receiving overwhelming orders during last week's bookbuilding for institutional investors.

LG Chem received around 2.5 trillion won worth of orders in the bookbuilding, making it the second-largest amount since the bookbuilding system was introduced in Korea in 2012.

The company plans to issue 820 billion won worth of sustainability bonds for three-year, five-year, and seven-year bonds; and 380 billion won worth of corporate bonds for 10-year and 15-year bonds.

LG Chem plans to use the proceeds to repay loans and invest in carbon reduction and eco-friendly biomaterials related businesses, alongside lending financial support for small business partners.

The Korean company will be issuing the bonds at a lower-than-expected interest rate. This is largely owing to institutional investors fiercely competing in the bookbuilding by placing orders with low interest rates.

Major domestic institutional investors, including pension funds, insurers, banks, brokerages and asset management companies, participated in LG Chem's bookbuilding. It is understood that the National Pension Service also put in an order worth 300 billion won ($272 million).

The Korean company has been performing well in its core operations, such as petrochemicals and advanced materials. Recently, the company also began making a profit in its new secondary battery business.

"We were able to successfully carry out a large-scale bond issue despite spinning off our battery division, thanks to the investors determining our business portfolio to be promising," said Cha Dong-seok, the chief financial officer at LG Chem.

Moving forward, LG Chem will set up measures to become a leading company in the environmental, social and governance (ESG) space, according to CFO Cha.

Write to Jin-sung Kim at

Danbee Lee edited this article.

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