Kyobo Securities Issues KRW 19.9 Billion in Equity-Linked Bonds Series 12577-12580, Proceeds for Hedging and Investment
On June 26, 2026, Kyobo Securities issued four series of equity-linked bonds totaling KRW 19.9 billion. Each series amounts to KRW 4.975 billion with an issue price of KRW 9,950 per bond, a 0.5% discount from the face value of KRW 10,000.
The bonds are principal-guaranteed with cash settlement. Underlying assets include Samsung Electronics, SK Hynix, Hyundai Motor individually, and a dual-asset basket of Samsung and SK Hynix. Maturity is July 12, 2029. Automatic early redemption occurs if the underlying price is at least 85% or 90% of the initial strike price on evaluation dates. Monthly coupons are paid if the underlying stays above 70% of the initial price, offering annual coupon rates between 7.41% and 10.74% for single-asset bonds.
Kyobo Securities holds a AA- credit rating from Korea Ratings and NICE as of June 15, 2026. Proceeds will be used for hedging and financial investment to ensure stable repayment. The bonds are unlisted and not protected by depositor insurance. Early redemption may incur principal loss if redeemed at 90-95% of fair value. As of Q1 2026, Kyobo's credit conversion amount for derivatives stood at KRW 672.9 million.
[AI Summary]This principal-guaranteed ELB issuance by Kyobo Securities is debt financing with no dilution, neutral for capital structure. The defensive use of funds for hedging limits growth impact. The AA- issuer rating indicates low credit risk, but unsecured status means potential loss in default. Overall, a neutral investment stance is warranted.