Kiwoom Securities Issues 10 Billion Won Principal-Guaranteed ELB, No Shareholder Dilution
Kiwoom Securities issues its 681st Dream Public Offering Derivative Combination Bond, a 10 billion won principal-guaranteed equity-linked bond linked to Samsung Electronics common stock with a low risk rating of grade 5 and annual coupon around 3.75%.
The bond is unsecured and not protected by the Depositor Protection Act; the issuer's credit rating is AA indicating stable financial health.
Proceeds will be used for hedging the underlying asset exposure. The bond has no conversion feature thus no dilution for existing shareholders. The issuance size is approximately 0.11% of market capitalization minimal.
[AI Summary]Kiwoom Securities issuance of a 10 billion won principal-guaranteed ELB has negligible impact on shareholder value due to no dilution however investors should note counterparty credit risk and possible principal loss upon early redemption.