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Corporate bonds

KOMIPO raises $300 mn in dollar bonds at lower-than-expected cost

Orders from Europe, Asia investors total $2.7 billion in bookbuilding

By Aug 03, 2021 (Gmt+09:00)

(Source: Getty Images Bank)
(Source: Getty Images Bank)

Korea Midland Power Co. (KOMIPO) raised $300 million in a dollar corporate bond at a lower interest rate than planned on strong demand among foreign investors.

KOMIPO sold the five-year unguaranteed bond at about 1.3% per annum, 0.62 percentage point higher than the five-year US Treasury yield, according to the investment banking (IB) industry sources on Aug. 3. The spread was narrower than KOMIPO’s initial guidance of plus 1 percentage point.

It received $2.7 billion worth of orders from 15 institutional investors in Europe and Asia, excluding US names, during the bookbuilding.

Moody’s Investors Service and Standard & Poor's (S&P) rated the KOGAS bonds at Aa2 and AA, respectively, the same as their sovereign ratings on South Korea.

Citigroup Global Markets, HSBC and UBS underwrote the bond issues.

KOMIPO is operating major thermal power plants in South Korea.

In overseas markets, the company is responsible for 6% of electricity supply in Java, Indonesia, through power plants. It is also working on overseas renewable energy development such as the Boulder Photovoltaic project in Nevada, US, and  the Stavro Wind Farm in Sweden.

Write to Hyun-Il Lee at hiuneal@hankyung.com

Jongwoo Cheon edited this article.

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