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Bond issuance

CJ CGV receives $14.5 bn demand for perpetual convertible bond issues

Overwhelming demand reflects expectations of near-term recovery for the cinema industry

By Jun 04, 2021 (Gmt+09:00)

CJ CGV receives .5 bn demand for perpetual convertible bond issues

South Korea’s leading multiplex cinema chain CJ CGV has received 16.2 trillion won ($14.5 billion) in investor demand for the perpetual convertible bonds it is issuing to bolster its financial health.

According to the investment banking industry on June 4, the company received 77 times more orders from individual investors for the planned 211.3 billion won in convertible bonds during the two-day public subscription from Thursday.

CJ CGV earlier said it wanted to raise 300 billion won by issuing CBs to its existing shareholders, but secured only 88.7 billion won, or 30% of the planned amount, from them. It then sought to sell the remaining 211.3 billion won worth of perpetual bonds to retail investors.

The bonds with a 30-year maturity carry a coupon rate of 1%, much lower than other similarly dated bonds.

But the overwhelming demand reflects expectations that the cinema industry will soon recover from the protracted slump caused by the outbreak of the COVID-19 pandemic, analysts said.

Korean audiences will be able to return to movie theaters in the near future, resulting in higher box-office returns, as vaccination rates in Korea are steadily increasing, they said.

A CJ CGV movie theater shut down due to COVID 19
A CJ CGV movie theater shut down due to COVID 19

Buyers of the CBs, to be issued on June 8, can convert them into common shares of CJ CGV at 26,600 won a share. The conversion price represents a 17.4% discount to the stock’s June 4 closing price of 31,250 won on the main Kospi market.

The bond issue will help the multiplex cinema operator improve its financial status as the perpetual bond is recognized not as debt but as capital. Following the issuance, its debt ratio is expected to fall to 860% from as high as 2,373% in March.

Write to Jin-Seong Kim at

In-Soo Nam edited this article.
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