Author: Tronserve admin
Thursday 5th August 2021 02:28 AM
Kia Motors Mulls Additional Debt Issue After Latest Offering Drew Overwhelming Demand
South Korea’s second biggest carmaker Kia Motors Corp. mulls additional debt issue after it confirmed overwhelming demand for its 330 billion won ($268.7 million) in multi-trance offering on Tuesday.
The automaker attracted 720 billion won orders from institutional investors during the book building session, doubling its offer of 330 billion won worth, according to sources from investment banking industry.
It received 550 billion won worth orders for 250 billion won bonds in a 3-year maturity, 50 billion won for 30 billion won of 5-year bonds and 120 billion won for 50 billion won of 7-year notes.
The strong appetite would help the firm raise the debt in cheaper-expected rates. The three-year note is expected to be priced 20 basis points over the market yield of the same maturity and seven-year paper at 15 basis points over the market yield.
Its book runners - Korea Investment Securities, KB Securities and NH Investment Securities – are mulling upping the offering and plan to complete the issuance on April 22.
Kia Motors has a long-term rating of AA0, the fifth highest grade. Although it dropped one notch from AA+ at the end of last year, its outlook remained as stable. State-run Korea Development Bank (KDB)’s decision to buy 50 billion won worth bonds also boosted market confidence, according to market sources.
Given the strong institutional appetite, Korean companies can expect to raise debt in more favorable terms in May, analysts said.