Kyobo Securities Issues 3 Billion KRW KB Financial-Linked Monthly Coupon ELB with Principal Protection
Kyobo Securities is issuing its 436th Equity-Linked Bond ELB worth 3 billion KRW. The underlying asset is KB Financial common stock with a 3-year maturity ending June 28 2029.
This principal-protected structure pays a monthly coupon of 0.45% annualized 5.40% if the underlying closes at or above 80% of the initial strike price. At maturity or upon auto-call the principal is fully protected at 100%.
Auto-call conditions trigger every six months if the underlying is at or above 90% of the initial price. The bond is unlisted so liquidity is limited. Early redemption by the investor is possible at 95% of fair value or 90% within the first six months but may result in principal loss.
Issuer Kyobo Securities holds a stable credit rating of AA-. The fair value as of the filing date was 9,746.81 KRW slightly below the face value of 10,000 KRW indicating a small premium issuance.
This product is not covered by deposit insurance and carries credit risk dependent on the issuer's solvency. Investors should carefully consider these risks.
[AI Summary]Kyobo Securities 3 billion KRW ELB issuance raises funds without diluting existing shareholders and offers a stable income structure. However as an equity-linked product it carries risks of missed coupon payments due to underlying price movements and potential losses upon early redemption. The issuer AA- credit rating indicates low default risk.