Kyobo Securities Issues KRW 6 Billion ELS Linked to Samsung Electronics and SK Hynix... High-Risk Product with Potential Principal Loss
Kyobo Securities is publicly offering two Equity-Linked Securities (ELS) totaling KRW 6 billion (KRW 3 billion per series) from June 1 to June 10, 2026, linked to Samsung Electronics common stock and SK Hynix common stock.
The 1st series is a 3-year step-down auto-callable structure (maturity June 13, 2029) offering a high coupon of 37.20% p.a., but with a knock-in barrier of 35%; if any underlying falls below 35% of its initial price, principal loss may occur.
The 2nd series pays a monthly coupon of 2.15% (25.80% p.a.) and has a lower knock-in barrier of 30%, increasing the risk of principal loss; at maturity, a decline below 60% triggers principal loss.
Both products are not protected by the Deposit Insurance Act and are classified as high-complexity financial investments (Grade 1) with a maximum potential loss of 100% of principal.
Kyobo Securities' credit rating is AA- (from KIS and NICE as of June 2025); in case of issuer default, investors may lose both principal and returns.
This issuance is part of a shelf registration (total limit KRW 2.4 trillion) with a remaining capacity of approximately KRW 2.3 trillion within the offering period (May 2026 – May 2027).
Proceeds will be used for hedging transactions (trading underlying assets, derivatives) and investments in financial products to ensure stable repayment.
If total subscriptions fall below KRW 500 million, the issuance may be canceled. The securities are unlisted, making early redemption difficult and potentially incurring losses if redeemed before maturity.
[AI Comprehensive Analysis]This disclosure represents a routine ELS issuance for Kyobo Securities, with no direct impact on shareholder value or financial structure. However, given the high-risk nature, increased market volatility could raise hedging costs and reputational risk, though the short-term stock price impact is neutral.