Kyobo Securities Issues 10 Billion Won Equity-Linked Bonds Linked to Hyundai Motor with Monthly Coupon and Principal Protection at Maturity
Kyobo Securities has secured effective registration for its 12586th series of equity-linked derivative bonds on July 1 2026 with a total offering of 10 billion won. Subscription and payment date is July 10 2026 with a maturity of July 12 2029 three years.
Underlying asset is Hyundai Motor common stock with monthly coupons of 0.6825% annual 8.19% payable if the closing price on coupon evaluation dates is at or above 65% of the initial strike price. Automatic early redemption occurs semi-annually if the underlying is at or above 75% of the initial price returning 100% of principal. At maturity principal is fully protected regardless of the underlying performance providing a principal-guaranteed structure.
The bonds are unsecured and unguaranteed relying on Kyobo Securities AA- credit rating and are not covered by depositor protection. Proceeds are earmarked for hedging transactions and investment in financial products with net proceeds of approximately 99.995 billion won after deducting 50 million won in issuance costs.
Early redemption upon investor request will be at 95% of fair value or 90% during the first six months which may result in principal loss. The bonds are not listed on an exchange limiting liquidity.
[AI Summary]This 10 billion won ELB issuance by Kyobo Securities linked to Hyundai Motor poses no direct dilution to existing shareholders and offers full principal protection at maturity. However the use of proceeds for hedging limits strategic growth impact. While the AA- issuer credit rating is sound investors should consider the risk of missed coupons due to market volatility and potential principal loss upon early redemption.