Kyobo Securities Issues 60 Billion Won in K-ELS Series 3 and 4 Linked to Samsung Electronics and SK Hynix High-Risk Structured Product Analysis
Kyobo Securities launched a public offering of K-ELS Series 3 and Series 4 equity-linked derivative securities totaling 60 billion won on June 5 2026 with underlying assets of Samsung Electronics and SK Hynix common stocks.
Series 3 is a 3-year principal-protected note with a step-down autocall structure and a knock-in barrier of 35% resulting in a maximum loss of 100% as a high-difficulty product.
Series 4 is a principal-not-guaranteed note with monthly coupon payments coupon barrier of 50% step-down autocall and knock-in barrier of 30% also with maximum loss of 100%.
Issuer Kyobo Securities holds a AA- credit rating from Korea Ratings and Korean Credit Ratings and these unsecured unguaranteed securities are not protected by the Depositor Protection Act.
Proceeds will be used for hedging transactions including underlying asset trading and derivatives trading representing a typical risk management allocation.
[AI Summary]Kyobo Securities 60 billion won K-ELS issuance involves no equity dilution as it is a derivative funding. While it may improve short-term profitability the high-risk structure exposes the issuer to increased hedging costs in case of sharp underlying asset declines potentially impacting financial stability. Adequate risk disclosures were provided for investor protection.