LOTTE Himart Issues 50 Billion KRW Public Bonds to Refinance Existing CP, Maintains A+ Credit Rating with Improved Financial Structure
LOTTE Himart will issue 50 billion KRW in unsecured public bonds Series 13-1 and 13-2 to repay 50 billion KRW of corporate paper maturing at the end of April 2026, converting short-term debt into long-term fixed-rate debt for financial stability.
The issuance size is approximately 26.5% of market cap but does not dilute equity. Total borrowings of 582.3 billion KRW will see a 50 billion KRW replacement, with the debt ratio falling 13.7 percentage points year-on-year to 89.9%.
Credit rating agencies Korea Ratings and NICE assigned an A+ stable rating to the new bonds, consistent with existing bonds and CP ratings.
Interest coverage ratio stands at 0.5x, but operating cash flow is healthy at 156.5 billion KRW and cash holdings are 64.7 billion KRW.
LOTTE Himart holds 472,000 treasury shares 2.0% from a 2021 buyback for share price stabilization, with no current plans for cancellation or additional purchase.
[AI Summary]This bond issuance is a defensive refinancing of maturing CP. While it improves financial structure and maintains credit rating, the company faces headwinds from a mature home appliance market and intensifying competition. Bondholders can expect stable repayment but limited upside.