NH Investment & Securities Issues 30 Billion KRW DLB Linked to CD Rate for Hedging, No Equity Dilution

NH Investment & Securities issues 30 billion KRW of its 1738th series Derivative-Linked Bond DLB. The issue price is 100,000 KRW per security with total of 300,000 securities and a maturity date of June 25, 2029.
The underlying asset is the CD 91-day final quote yield. The return is determined by the number of days the yield remains below a threshold rate within each observation period, offering up to 6.00% per annum. The issuer holds an optional early redemption right after one year, and investors may incur principal losses upon early redemption.
Proceeds will be used for hedging transactions to ensure stable redemption payments, including purchases of high-grade bonds and derivative trading. NH Investment & Securities maintains a credit rating of AA+, but the securities are unsecured and not covered by the depositor protection act.
This issuance utilizes 30 billion KRW from the remaining 1.47 trillion KRW shelf registration, representing only 0.27% of market capitalization, resulting in zero shareholder dilution. However, as a derivative-linked product, it is exposed to underlying asset price fluctuations and issuer credit risk.
[AI Summary]NH Investment & Securities' 30 billion KRW DLB issuance is a hedging-related debt funding with no capital impact on shareholders. Despite the AA+ credit rating, investors should note the risk of principal loss and limited liquidity inherent in such derivative-linked bonds.