Kyobo Securities Issues 99.3 Billion KRW ELS Linked to Samsung Electronics and SK Hynix, Funds for Hedging and Investment
Kyobo Securities issues two tranches of equity-linked securities ELS linked to Samsung Electronics common stock and SK Hynix common stock, each worth 4.965 billion KRW for a total of 9.93 billion KRW.
These ELS are partial principal protection type, where if the final evaluation price is below 75% of the initial strike price, investors incur a 10% loss on principal, protecting 90% of principal. Monthly coupon payments are conditional on the underlying closing price being at least 80% of the initial strike price, with annual coupon rates of 10.92% for Samsung-linked and 12.93% for SK Hynix-linked products.
The raised funds will be used for hedging transactions in underlying assets and derivatives to ensure stable payment of redemption amounts. The securities are unlisted and not protected by the Depositor Protection Act.
The issuer Kyobo Securities has a credit rating of AA- from Korea Ratings and Korea Investors Service assessed in June 2025. The securities are unsecured and unguaranteed debt ranking equally with other unsecured obligations, and in case of issuer default, investors may lose their principal.
[AI Summary]This ELS issuance by Kyobo Securities is a routine funding for hedging purposes with no impact on equity dilution. The AA- credit rating and partial principal protection limit maximum loss to 10%, but the unlisted nature implies low liquidity, posing investment risk.