Hanwha Investment & Securities Issues KRW 29.96 Billion ELB Linked to SK Hynix, Offering Principal-Protected Equity-Linked Bonds
Hanwha Investment & Securities is publicly offering two ELB tranches linked to SK Hynix common stock totaling KRW 29.96 billion. Tranche 1114 amounts to KRW 19.98 billion with a 6-month maturity, and tranche 1115 is KRW 9.98 billion with a 1-year maturity.
This issuance is for hedging purposes and constitutes debt financing with zero dilution to existing shareholders. Proceeds will be used for underlying asset trading and derivative hedging.
The products are structured as principal-protected, paying at least the principal at maturity, but early redemption may incur losses as the redemption price is set at 90-95% of fair value. They are unlisted, limiting liquidity.
Hanwha Investment & Securities holds an AA- credit rating, but these bonds are not covered by depositor protection and are exposed to issuer credit risk.
[AI Summary]Hanwha Investment & Securities raises KRW 29.96 billion via SK Hynix-linked ELBs for hedging, with no shareholder dilution. Investors face early redemption and liquidity risks despite principal protection at maturity. The issuer's AA- rating is stable, but the unlisted nature and lack of deposit insurance require caution.